<PAGE>

                                                      Exhibit (99)-1 
                                                      Unicom Corporation
                                                      Form 10-K File No. 1-11375

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   Form 8-K

                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934



Date of Report (Date of
earliest event reported):      January 26, 1996


                              Unicom Corporation
            (Exact name of registrant as specified in its charter)
 

   Illinois                      1-11375                     36-3961038
(State or other                (Commission                   (IRS Employer
jurisdiction of                File Number)                  Identification No.)
incorporation)
 
37th Floor, 10 South Dearborn Street,
Post Office Box A-3005, Chicago, Illinois                    60690-3005
(Address of principal executive offices)                     (Zip Code)


Registrant's telephone number,
including area code:                                         (312) 394-7399

<PAGE>
 
The purpose of this Current Report is to file certain financial information
regarding the Registrant (Unicom Corporation) and its subsidiaries. Such
financial information is set forth in the exhibits to this Current Report.


         
Item 5.   Other Events
-------   ------------

          Exhibits
          --------

   (23)   Consent of Independent Public Accountants

   (27)   Financial Data Schedule of Unicom Corporation

   (99)   Unicom Corporation and Subsidiary Companies - Certain Financial
            Information as of and for the Year Ended December 31, 1995:

          --Summary of Selected Consolidated Financial Data
          --Price Range and Cash Dividends Paid Per Share of Common Stock
          --1995 Consolidated Revenues and Sales
          --Management's Discussion and Analysis of Financial Condition and
              Results of Operations
          --Report of Independent Public Accountants
          --Statements of Consolidated Income
          --Consolidated Balance Sheets
          --Statements of Consolidated Capitalization
          --Statements of Consolidated Retained Earnings
          --Statements of Consolidated Cash Flows
          --Notes to Financial Statements


                                      -2-

<PAGE>
 

                                   SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                           UNICOM CORPORATION
                                              (Registrant)


                                       By:      David A. Scholz  
                                           -----------------------
                                                David A. Scholz
                                                   Secretary




Date: February 9, 1996


                                      -3-

<PAGE>
 

                                 EXHIBIT INDEX



EXHIBIT
NUMBER                      DESCRIPTION OF EXHIBIT
------                      ----------------------

 (23)     Consent of Independent Public Accountants

 (27)     Financial Data Schedule of Unicom Corporation*

 (99)     Unicom Corporation and Subsidiary Companies - Certain
            Financial Information as of and for the Year Ended
            December 31, 1995:

          --Summary of Selected Consolidated Financial Data
          --Price Range and Cash Dividends Paid Per Share of Common Stock
          --1995 Consolidated Revenues and Sales
          --Management's Discussion and Analysis of Financial Condition
              and Results of Operations
          --Report of Independent Public Accountants
          --Statements of Consolidated Income
          --Consolidated Balance Sheets
          --Statements of Consolidated Capitalization
          --Statements of Consolidated Retained Earnings
          --Statements of Consolidated Cash Flows
          --Notes to Financial Statements


 *Previously filed and incorporated by reference to Unicom Corporation's 
  Form 8-K Current Report dated January 26, 1996.
<PAGE>
 

                                                     Exhibit (23)
                                                     Unicom Corporation
                                                     Form 8-K  File No. 1-11375



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
                   -----------------------------------------



     As independent public accountants, we hereby consent to the incorporation
by reference of our report dated January 26, 1996 on Unicom Corporation and
subsidiary companies' consolidated financial statements as of and for the year
ended December 31, 1995, included as an Exhibit to this Form 8-K Current Report
of Unicom Corporation dated January 26, 1996, into Unicom Corporation's
previously filed prospectuses dated March 18, 1994, constituting part of Form 
S-4 Registration Statement File No. 33-52109, as amended (relating to Common 
Stock of Unicom Corporation), as further amended by Post-Effective Amendment 
No. 1 on Form S-8 (relating to Commonwealth Edison Company's Employee Savings 
and Investment Plan) and Post-Effective Amendment No. 2 on Form S-8 (relating to
Unicom Corporation's Employee Stock Purchase Plan), and Form S-8 Registration
Statement File No. 33-56991 (relating to Unicom Corporation's Long-Term
Incentive Plan). We also consent to the application of our report to
Commonwealth Edison Company and subsidiary companies' ratios of earnings to
fixed charges and the ratios of earnings to fixed charges and preferred and
preference stock dividend requirements for each of the twelve months ended
December 31, 1995, 1994 and 1993 appearing in Exhibit 99 of this Form 8-K.



                                         ARTHUR ANDERSEN LLP



Chicago, Illinois
January 26, 1996

<PAGE>
 
                                                       Exhibit (99)
                                                       Unicom Corporation
                                                       Form 8-K File No. 1-11375
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          -----
<S>                                                                       <C>
Definitions..............................................................     2
Summary of Selected Consolidated Financial Data..........................     3
Price Range and Cash Dividends Paid Per Share of Common Stock............     3
1995 Consolidated Revenues and Sales.....................................     3
Management's Discussion and Analysis of Financial Condition and Results
 of Operations...........................................................  4-15
Report of Independent Public Accountants.................................    16
Consolidated Financial Statements--
  Statements of Consolidated Income for the years 1995, 1994 and 1993....    17
  Consolidated Balance Sheets--December 31, 1995 and 1994................ 18-19
  Statements of Consolidated Capitalization--December 31, 1995 and 1994..    20
  Statements of Consolidated Retained Earnings for the years 1995, 1994
   and 1993..............................................................    21
  Statements of Consolidated Cash Flows for the years 1995, 1994 and
   1993..................................................................    22
  Notes to Financial Statements.......................................... 23-44
</TABLE>
 
                                       1
<PAGE>
 
                                  DEFINITIONS
 
  The following terms are used in this document with the following meanings:
 
<TABLE>
<CAPTION>
         TERM                                         MEANING
-----------------------  ------------------------------------------------------------------
<S>                      <C>
AFUDC                    Allowance for funds used during construction
AMT                      Alternative minimum tax
CERCLA                   Comprehensive Environmental Response, Compensation and Liability
                          Act of 1980, as amended
CFC                      Chlorofluorocarbon
Circuit Court            Circuit Court of Cook County, Illinois
Clean Air Amendments     Clean Air Act Amendments of 1990
ComEd                    Commonwealth Edison Company
Cotter                   Cotter Corporation, which is a wholly-owned subsidiary of ComEd.
DOE                      U.S. Department of Energy
FASB                     Financial Accounting Standards Board
FERC                     Federal Energy Regulatory Commission
Fuel Matters Settlement  A settlement relating to the ICC fuel reconciliation proceedings
                          involving ComEd for the period from 1985 through 1988 and to
                          future challenges by the settling parties to the prudence of
                          ComEd's western coal costs for the period from 1989 through 1992.
ICC                      Illinois Commerce Commission
Indiana Company          Commonwealth Edison Company of Indiana, Inc., which is a wholly-
                          owned subsidiary of ComEd.
MAIN                     Mid-America Interconnected Network
MGP                      Manufactured gas plant
NEIL                     Nuclear Electric Insurance Limited
NML                      Nuclear Mutual Limited
NOPR                     Notice of Proposed Rulemaking issued by the FERC
NRC                      Nuclear Regulatory Commission
Rate Matters Settlement  A settlement concerning the proceedings relating to ComEd's 1985
                          and 1991 ICC rate orders (which orders related to, among other
                          things, the recovery of costs associated with ComEd's four most
                          recently completed nuclear generating units), the proceedings
                          related to the reduction in the difference between ComEd's summer
                          and non-summer residential rates that was effected in the summer
                          of 1988, outstanding issues related to the appropriate interest
                          rate and rate design to be applied to a refund made by ComEd
                          during 1990 related to a 1988 ICC rate order, and matters related
                          to a rider to ComEd's rates that it was required to file as a
                          result of the change in the federal corporate income tax rate
                          made by the Tax Reform Act of 1986.
Rate Order               ICC rate order issued on January 9, 1995, as subsequently modified
Remand Order             ICC rate order issued in January 1993, as subsequently modified
SEC                      Securities and Exchange Commission
SFAS                     Statement of Financial Accounting Standards
Trust                    ComEd Financing I, which is a wholly-owned subsidiary trust of
                          ComEd.
Unicom                   Unicom Corporation
Unicom Enterprises       Unicom Enterprises Inc., which is a wholly-owned subsidiary of
                          Unicom.
Unicom Thermal           Unicom Thermal Technologies Inc., which is a wholly-owned
                          subsidiary of Unicom Enterprises.
Units                    ComEd's nuclear generating units known as Byron Unit 2 and
                          Braidwood Units 1 and 2
U.S. EPA                 U.S. Environmental Protection Agency
</TABLE>
 
                                       2
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                    1995       1994    1993       1992    1991
                                   -------    ------- -------    ------- -------
                                    (MILLIONS OF DOLLARS EXCEPT PER SHARE
                                                    DATA)
<S>                                <C>        <C>     <C>        <C>     <C>
Operating revenues...............  $ 6,910    $ 6,278 $ 5,260    $ 6,026 $ 6,276
Net income.......................  $   640(1) $   355 $    46(2) $   443 $    17
Earnings per common share........  $  2.98(1) $  1.66 $  0.22(2) $  2.08 $  0.08
Cash dividends declared per com-
 mon share.......................  $  1.60    $  1.60 $  1.60    $  2.30 $  3.00
Total assets (at end of year)....  $23,247    $23,121 $24,383    $20,993 $17,365
Long-term obligations at end of
 year excluding current portion:
 Long-term debt, preference stock
  and preferred securities sub-
  ject to mandatory redemption
  requirements...................  $ 7,011    $ 7,745 $ 7,861    $ 7,913 $ 7,081
 Accrued spent nuclear fuel dis-
  posal fee and related interest.  $   624    $   590 $   567    $   549 $   530
 Capital lease obligations.......  $   376    $   433 $   323    $   347 $   396
 Other long-term obligations.....  $ 1,826    $ 1,754 $ 1,718    $   666 $   341
</TABLE>
--------
(1) Net income in 1995 includes an extraordinary loss related to the early
    redemption of long-term debt of $20 million or $0.09 per common share.
(2) Net income in 1993 includes the cumulative effect of change in accounting
    for income taxes of $10 million or $0.05 per common share.
 
PRICE RANGE* AND CASH DIVIDENDS PAID PER SHARE OF COMMON STOCK
 
<TABLE>
<CAPTION>
                             1995 (BY QUARTERS)          1994 (BY QUARTERS)
                         --------------------------- ---------------------------
                         FOURTH THIRD  SECOND FIRST  FOURTH THIRD  SECOND FIRST
                         ------ ------ ------ ------ ------ ------ ------ ------
<S>                      <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Price range:
 High..................  33 7/8 30 1/2 27 3/4 26 1/8 24 3/4 24 7/8  26    28 3/4
 Low...................  30 1/4 26 1/4 23 5/8 23 1/4 20 5/8 21 1/4  22    25 1/8
Cash dividends paid....  40c    40c    40c    40c    40c    40c     40c   40c
</TABLE>
* As reported as NYSE Composite Transactions for Unicom on and after September
  1, 1994 and for ComEd prior to that date.
--------
 
  Unicom's common stock is traded on the New York, Chicago and Pacific stock
exchanges, with the ticker symbol UCM. At December 31, 1995, there were
approximately 171,000 holders of record of Unicom's common stock.
 
1995 CONSOLIDATED REVENUES AND SALES
 
<TABLE>
<CAPTION>
                           OPERATING            KILOWATTHOUR INCREASE/            INCREASE/
                           REVENUES   INCREASE     SALES     (DECREASE)           (DECREASE)
                          (THOUSANDS) OVER 1994  (MILLIONS)  OVER 1994  CUSTOMERS OVER 1994
                          ----------- --------- ------------ ---------- --------- ----------
<S>                       <C>         <C>       <C>          <C>        <C>       <C>
Residential.............  $2,621,038    15.3%      23,303        9.0 %  3,079,381     1.1 %
Small commercial and
 industrial.............   2,073,998     8.2%      25,313        4.1 %    288,848     0.7 %
Large commercial and
 industrial.............   1,425,784     3.2%      23,777        1.4 %      1,539     0.7 %
Public authorities......     487,142     7.7%       7,158        4.0 %     12,039    (0.2)%
Electric railroads......      26,894     2.7%         390       (2.0)%          2      --
                          ----------               ------               ---------
Ultimate consumers......  $6,634,856     9.7%      79,941        4.6 %  3,381,809     1.0 %
Sales for resale........     207,256               11,412                      24
Other revenues..........      67,933                  --                      --
                          ----------               ------               ---------
 Total..................  $6,910,045    10.1%      91,353        7.3 %  3,381,833     1.0 %
                          ==========               ======               =========
</TABLE>
 
                                       3
<PAGE>
 
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
 
  On September 1, 1994, a corporate restructuring took place in which Unicom
became the parent holding company of ComEd and Unicom Enterprises, an
unregulated subsidiary engaged, through a subsidiary, in energy service
activities. The purpose of the restructuring was, in part, to permit Unicom
Enterprises to engage in energy service activities without the prior approval
of, or being regulated by, the ICC, in part to permit timely responses to
competitive activities which could adversely affect ComEd's utility business
and in part to permit Unicom to take advantage of unregulated business
opportunities.
 
  ComEd continues to represent substantially all of the assets, revenues and
net income of Unicom; and Unicom's resources and results of operations are
largely dependent on, and reflect, those of ComEd. Unicom's unregulated
subsidiaries are not expected to make material contributions to Unicom's
revenues or results of operations in the near future. Consequently, the
following discussion focuses on ComEd's utility operations although information
is also provided about Unicom's unregulated operations.
 
LIQUIDITY AND CAPITAL RESOURCES
 
                               UTILITY OPERATIONS
 
  Capital Budgets. ComEd and its electric utility subsidiary, the Indiana
Company, have a construction program for the three-year period 1996-98 which
consists principally of improvements to ComEd's and the Indiana Company's
existing nuclear and other electric production, transmission and distribution
facilities. It does not include funds (other than for planning) to add new
generating capacity to ComEd's system. The program, as approved by Unicom and
ComEd in December 1995, calls for electric plant and equipment expenditures of
approximately $2,695 million (excluding nuclear fuel expenditures of
approximately $885 million). It is estimated that such construction
expenditures, with cost escalation computed at 3.5% annually, will be as
follows:
 
<TABLE>
<CAPTION>
                                                          1996 1997 1998  TOTAL
                                                          ---- ---- ---- ------
                                                          (MILLIONS OF DOLLARS)
   <S>                                                    <C>  <C>  <C>  <C>
   Production............................................ $405 $390 $380 $1,175
   Transmission and Distribution.........................  390  405  410  1,205
   General...............................................  110  110   95    315
                                                          ---- ---- ---- ------
      Total.............................................. $905 $905 $885 $2,695
                                                          ==== ==== ==== ======
</TABLE>
 
  The construction program includes the replacement of the steam generators at
ComEd's Braidwood Unit 1 and Byron Unit 1 nuclear generating units, for service
in the years 1998 and 1999, respectively, at a total estimated cost of
approximately $470 million. Approximately $290 million of this estimated cost
is included in the construction expenditures shown above. ComEd is studying the
possibility of accelerating the replacement of the steam generators which could
increase the construction expenditures shown above.
 
  ComEd's forecasts of peak load indicate a need for additional resources to
meet demand, either through generating capacity or through equivalent purchased
power or demand-side management resources, in 1998 and each year thereafter
through the year 2000. The projected resource needs reflect the current
planning reserve margin recommendations of MAIN, the reliability council of
which ComEd is a member. ComEd's forecasts indicate that the need for
additional resources during this period would exist only during the summer
months. ComEd does not expect to make expenditures for additional capacity to
the extent the need for capacity can be met through cost-effective demand-side
management resources, non-utility generation or other power purchases. Based on
current market information, ComEd believes that adequate resources, including
cost-effective demand-side management resources, non-utility generation
resources and other-utility power purchases, could be obtained sufficient to
meet forecasted requirements through the year 2000.
 
                                       4
<PAGE>
 
  ComEd's construction program will be reviewed and modified as necessary to
adapt to changing economic conditions, rate levels and other relevant factors
including changing business and legal needs and requirements. ComEd cannot
anticipate all such possible needs and requirements. While regulatory needs in
particular are more likely, on balance, to require increases in construction
expenditures than decreases, financial constraints may require compensating or
greater reductions in other construction expenditures. See "Regulation" below
for additional information.
 
  Purchase commitments for ComEd and the Indiana Company, principally related
to construction and nuclear fuel, approximated $1,137 million at December 31,
1995. In addition, ComEd has substantial commitments for the purchase of coal
as indicated in the following table.
 
<TABLE>
<CAPTION>
      CONTRACT                                          PERIOD   COMMITMENT (1)
   --------------                                      --------- --------------
   <S>                                                 <C>       <C>
   Black Butte Coal Co................................ 1996-2007     $1,011
   Decker Coal Co..................................... 1996-2015     $  713
   Big Horn Coal Co................................... 1998          $   22
   Other commitments.................................. 1996          $    3
</TABLE>
  --------
  (1) Estimated costs in millions of dollars FOB mine. No estimate of future
      cost escalation has been made.
 
For additional information concerning these coal contracts and ComEd's fuel
supply, see "Results of Operations" below and Notes 1 and 21 of Notes to
Financial Statements.
 
  Capital Resources. ComEd has forecast that internal sources will provide more
than three-fourths of the funds required for ComEd's construction program and
other capital requirements, including nuclear fuel expenditures, contributions
to nuclear decommissioning funds, sinking fund obligations and refinancing of
scheduled debt maturities (the annual sinking fund requirements and scheduled
maturities for ComEd preference stock and long-term debt are summarized in
Notes 7 and 9, respectively, of Notes to Financial Statements). The forecast
assumes the rate levels reflected in the Rate Order remain in effect.
 
  The type and amount of external financing will depend on financial market
conditions and the needs and capital structure of ComEd at the time of such
financing. A portion of ComEd's financing is expected to be provided through
the continued sale and leaseback of nuclear fuel through ComEd's existing
nuclear fuel lease facility. See Note 18 of Notes to Financial Statements for
more information concerning ComEd's nuclear fuel lease facility. ComEd has
approximately $915 million of unused bank lines of credit at December 31, 1995
which may be borrowed at various interest rates and which may be secured or
unsecured. The interest rate is set at the time of a borrowing and is based on
several floating rate bank indices plus a spread which is dependent upon
ComEd's credit ratings or on a prime interest rate. Collateral, if required for
the borrowings, would consist of first mortgage bonds issued under and in
accordance with the provisions of ComEd's mortgage. See Note 10 of Notes to
Financial Statements for information concerning lines of credit. See the
Statements of Consolidated Cash Flows for the construction expenditures and
cash flow from operating activities for the years 1995, 1994 and 1993.
 
  During 1995, Unicom issued 424,480 shares of common stock for approximately
$11 million under its employee stock plans. The Trust also issued $200 million
of ComEd-obligated mandatorily redeemable preferred securities, the proceeds of
which were used to purchase ComEd's subordinated deferrable interest notes due
September 30, 2035. The proceeds of such notes were used by ComEd to refund
short-term debt incurred to meet current maturities of ComEd debt. ComEd sold
and leased back approximately $193 million of nuclear fuel through its existing
nuclear fuel lease facility.
 
  As of January 26, 1996, ComEd has an effective "shelf" registration statement
with the SEC for the future sale of up to an additional $805 million of debt
securities and cumulative preference stock for general corporate purposes of
ComEd, including the discharge or refund of other outstanding securities.
 
  Financial Condition. ComEd's financial condition will continue to depend on
its ability to generate revenues to cover its costs and to maintain adequate
debt and preferred and preference stock coverages and common stock equity
earnings. ComEd has no significant revenues other than from the sale of
 
                                       5
<PAGE>
 
electricity. In December 1995, ComEd announced a cap on base electric rates at
current levels. Consequently, ComEd's financial condition will be affected by,
and ComEd's management is addressing, actions to maintain and increase sales,
to control operating and capital expenditures, and to anticipate competitive
activities. See "Business and Competition" and "Regulation" below.
 
  During the past several years, ComEd has instituted cost reduction plans
including various workforce reductions. Such efforts included an offer of
voluntary early retirement which was made to ComEd and the Indiana Company
management, non-union and union employees eligible to retire or who became
eligible to retire after December 31, 1993 and before April 1, 1995. Such
program resulted in a charge to income of approximately $20.5 million (after
reflecting income tax effects), substantially all of which was recorded during
1994. ComEd is continuing to examine methods of reducing the size of its
workforce, including special severance offers. On October 30, 1995, ComEd
declared an impasse in the collective bargaining agreement negotiations with
its principal union and has implemented virtually all of the terms of its last
offered proposal prior to the impasse. Those terms include, among other things,
a wage increase retroactive to April 1, 1995 and a voluntary separation offer
for employees who accepted and left ComEd's employ by year-end 1995. The union
has filed an unfair labor practice charge with respect to ComEd's action with
the National Labor Relations Board. The voluntary separation offer, combined
with separation plans offered to selected groups of non-union employees,
resulted in a charge to income of approximately $59 million (after reflecting
income tax effects) or $0.27 per common share for the year 1995. This charge to
income occurred primarily in the fourth quarter of 1995 when most of the
acceptances of the offers occurred. ComEd expects to recover the costs of these
plans within two years as a result of reduced personnel.
 
  ComEd has also examined, and is continuing to examine, the possibility of
disposing of one or more of its fossil generating stations to a third party or
parties and entering into a long-term power purchase arrangement. In connection
with such examination, ComEd has solicited and received binding proposals with
respect to such a transaction involving its State Line and Kincaid generating
stations; and it is negotiating with possible purchasers with respect to such
transactions. As presently structured, such transactions would involve a sale
of the generating station assets at a price approximating their book value and
a fifteen-year power purchase arrangement. Any such transactions would be
subject to the negotiation of definitive agreements and regulatory approvals
and are not expected to have a material impact on ComEd's consolidated
financial position or results of operations.
 
  ComEd's securities and other securities guaranteed by ComEd are currently
rated by three principal securities rating agencies as follows:
 
<TABLE>
<CAPTION>
                                                                STANDARD DUFF &
                                                        MOODY'S & POOR'S PHELPS
                                                        ------- -------- ------
     <S>                                                <C>     <C>      <C>
     First mortgage and secured pollution control
      bonds............................................  Baa2     BBB     BBB
     Publicly-held debentures and unsecured pollution
      control obligations..............................  Baa3     BBB-    BBB-
     Convertible preferred stock.......................  baa3     BBB-    BBB-
     Preference stock..................................  baa3     BBB-    BBB-
     ComEd-obligated mandatorily redeemable preferred
      securities of the Trust..........................  baa3     BBB-    BBB-
     Commercial paper..................................  P-2      A-2     D-2
</TABLE>
 
  As of January 1996, Standard & Poor's rating outlook on ComEd remained
stable. As of October 1995, Moody's rating outlook on ComEd also remained
stable. In August 1995, Duff & Phelps upgraded its rating of ComEd's preferred
and preference stock from BB+ to BBB- and reaffirmed that its rating outlook on
ComEd remained stable.
 
  Business and Competition. The electric utility business has historically been
characterized by retail service monopolies in state or locally franchised
service territories. Investor-owned electric utilities have tended to be
vertically integrated with all aspects of their business subject to pervasive
regulation. Although customers have normally been free to supply their electric
power needs through self-generation, they have not had a choice of electric
suppliers and self-generation has not generally been economical.
 
                                       6
<PAGE>
 
  The market place in which electric utilities like ComEd operate has become
more competitive as a result of technological and regulatory changes, and many
observers believe competition will intensify. Self-generation can be economical
for certain customers, depending on how and when they use electricity and other
customer-specific considerations. A number of competitors are currently seeking
to identify and do business with those customers. In addition, suppliers of
other forms of energy are increasingly competing to supply energy needs which
historically were supplied primarily or exclusively by electricity. Also, a
number of electric utilities (including utilities bordering ComEd's service
area) have announced plans to combine, or have combined, to achieve certain
size and operating efficiencies in response to expected changes in the market
place. Finally, both the state and federal regulatory framework under which
ComEd and other electric utilities have operated are under review. In recent
years, there has been increasing debate at the state and federal levels
regarding the structure and regulation of the electric utility industry. In
particular, these discussions have focused on whether certain aspects of the
industry, such as generation, could be more efficiently provided under a more
competitive scheme.
 
  A central feature of the current debate over deregulation and changed
regulation in the electric utility industry is the extent to which electric
utilities will be permitted to recover so-called "stranded" or "strandable"
costs incurred to fulfill their duty to serve all of the electricity needs
within their service territories. These costs would be stranded to the extent
that market-based rates would be insufficient to allow for full recovery of the
investments.
 
  ComEd cannot estimate its strandable investment with any degree of accuracy
at this time because of the number of variables involved. ComEd, however, is
taking steps, such as aggressive cost-cutting measures and accelerated
depreciation, to minimize its potential exposure. The regulatory and
legislative initiatives that ComEd has proposed, described below, contemplate a
full recovery of ComEd's costs to meet its duty to serve.
 
  The Energy Policy Act of 1992 has had a significant effect on companies
engaged in the generation, transmission, distribution, purchase and sale of
electricity. This Act, among other things, expands the authority of the FERC to
order electric utilities to transmit or "wheel" wholesale power for others, and
facilitates the creation of non-utility electric generating companies. In March
1995, the FERC issued a NOPR seeking comments on proposals intended to
encourage a more competitive wholesale electric power market. The NOPR
addresses both open access transmission and stranded cost issues. ComEd is
unable to predict the structure and effect of any rule that the FERC may
ultimately adopt based upon the NOPR.
 
  ComEd is facing increased competition from several non-utility businesses
which seek to provide energy services to users of electricity, especially
larger customers such as industrial, commercial and wholesale customers. Such
suppliers include independent power producers and unregulated energy services
companies. In this regard, natural gas utilities operating in ComEd's service
area have established subsidiary ventures to provide heating, ventilating and
air conditioning services, attempting to attract ComEd's customers. Also,
several utilities in the United States have established unregulated energy
services subsidiaries which pursue business opportunities outside of the
utilities' regular service areas. In addition, cogeneration and energy services
companies have begun soliciting ComEd's customers to provide alternatives to
using ComEd's electricity. In October 1993, the ICC granted ComEd the authority
to negotiate special discount contract rates with new or existing industrial
customers for up to a total of 400 megawatts of added load, where the customers
would not have chosen service from ComEd for the increased load in the absence
of the discount rates. In addition, in June 1994, the ICC granted ComEd the
authority to negotiate special discount contract rates with up to 25 of its
largest existing customers, where such contracts would be necessary to retain
the customers' existing load on ComEd's system. The Illinois Appellate Court
reversed the latter ICC decision, ruling that state law prohibited the
confidential aspects of the contracts. ComEd has petitioned the Illinois
Supreme Court to review the reversal. ComEd has also sought and received ICC
approval for the eleven contracts at special discount rates which it negotiated
prior to the Illinois Appellate Court's decision.
 
 
                                       7
<PAGE>
 
  In 1994, the ICC formed a task force for the purpose of conducting a broad-
based and open examination of the expanding presence of market components
within the electric utility industry. Participants from more than 40
organizations, including representatives from the electric utility industry
(including ComEd), met to examine three broad issues: effects of regulation,
competition and future regulatory and legislative changes. In May 1995, the
task force issued its report sharing the views of the participants on the
issues.
 
  Legislation has been passed in Illinois to review the need for changes in the
regulatory framework under which Illinois electric utilities operate. The Joint
Committee on Electric Utility Regulatory Reform was created pursuant to
House/Senate Joint Resolution 21 to develop any legislative reform proposals it
finds necessary. A final legislative proposal is to be delivered by November 8,
1996. ComEd is participating as a member of the Technical Advisory Group. A
bill allowing utilities to submit plans for alternative regulation, such as
price caps or incentive regulation, has been signed by the Governor of
Illinois. On December 11, 1995, ComEd announced a series of customer
initiatives as part of its larger ongoing effort to address the need to give
all customer classes the opportunity to benefit from increased competition in
the electric utility business, while retaining the benefits (such as
reliability) of current regulation and ensuring utilities' cost recovery for
commitments made under the obligation to serve customers. The initiatives
include (i) a five-year cap on base electric rates at current levels, (ii)
certain energy monitoring and management programs designed to monitor and
control energy usage, particularly during certain peak periods, (iii) single
statement, or unified, billing for certain multi-site customers, (iv) certain
incentives for manufacturing customers looking to expand operations or to
locate in northern Illinois and (v) market pricing options for up to ten
percent of certain large industrial customers' existing electric energy
requirements and all of their incremental requirements. ComEd anticipates the
initiatives will be fully implemented in 1997 and will reduce its revenues by
approximately $42 million annually (including the effects of previously
implemented initiatives and before income tax effects) primarily through
changes in energy utilization and increase its costs by at least $30 million
annually (before income tax effects) through the acceleration of depreciation
charges on its nuclear generating units. ComEd expects to file a request for
ICC approval of the accelerated depreciation initiatives in the near future.
Management expects the financial impact of these initiatives will be
substantially offset by ComEd's cost reduction efforts and expected growth in
its business. ComEd also continues to consider the possibility of additional
accelerated depreciation options.
 
  Under ComEd's initiatives, the five-year base rate cap at current levels
became effective in December 1995 and will extend until January 1, 2001. The
rate cap does not affect ComEd's fuel cost or nuclear decommissioning cost
recovery provisions. ComEd's fuel cost variances will continue to be collected
through its fuel adjustment clause, and such collections will continue to be
subject to annual reconciliation proceedings before the ICC. Nuclear
decommissioning cost variances will continue to be collected under a rider that
was approved in the Rate Order, and such rider is intended to allow annual
adjustments in decommissioning cost recoveries from ratepayers as changes in
cost estimates occur. See "Depreciation and Decommissioning" in Note 1 of Notes
to Financial Statements for additional information regarding the
decommissioning costs rider.
 
  On December 13, 1995, ComEd announced a proposal to amend certain provisions
of the Illinois Public Utilities Act. The proposal would, among other things,
allow Illinois utilities to launch five-year experimental "direct access"
programs, whereby certain customers would have the opportunity to obtain some
of their electric energy requirements from their chosen supplier. If the
proposal is adopted as legislation, such "direct access" programs could begin
as early as 1998; and under the legislation, ComEd announced it would offer
such a program for new or expanded load of three megawatts or greater in its
northern Illinois service territory. Under ComEd's proposal, if such "direct
access" proves workable, and the ICC finds it to be in the public interest, the
ICC could order it as an option for all electricity consumers in Illinois
starting in 2003. Other Illinois utilities have also initiated both legislative
and regulatory proposals. Both Illinois Power Company and Central Illinois
Light Company have filed
 
                                       8
<PAGE>
 
proposed retail wheeling experiments with the ICC. These experiments are
currently the subject of hearings. ComEd cannot predict whether, or in what
form, these proposals may be approved. See "Regulation" and "Regulatory Assets
and Liabilities" in Note 1 of Notes to Financial Statements.
 
  Capital Structure. The ratio of ComEd's long-term debt to total
capitalization has decreased to 49.3% at December 31, 1995 from 54.6% at
December 31, 1994. This decrease is related primarily to the retirement and
early redemption of long-term debt.
 
                             UNREGULATED OPERATIONS
 
  Unicom Enterprises is engaged, through a subsidiary, in energy service
activities which are not subject to utility regulation by state or federal
agencies. The subsidiary, Unicom Thermal, currently provides district cooling
services to office and other buildings from a central location in the city of
Chicago. District cooling involves, in essence, the production of chilled water
at a central location(s) and its circulation to and from such location(s) to
customers' buildings through a closed circuit of piping. Such water is
circulated through customers' premises for air conditioning. This process is
used in lieu of self-generated cooling utilizing CFC refrigerants. As a result
of the Clean Air Amendments, the manufacture and use of CFCs will be curtailed,
commencing in 1996, thereby creating an excellent marketing opportunity for
non-CFC based systems, such as district cooling. Unicom Thermal and the city of
Chicago have entered into a non-exclusive franchise agreement. Unicom Thermal's
first plant began service in May 1995, and sufficient contracts have been
secured to utilize the full capacity of the plant. As of January 10, 1996,
Unicom Thermal Technologies Boston, a subsidiary of Unicom Thermal, has entered
into a limited liability corporation as a minority member with Boston Edison
Technologies Group to provide district cooling services to office and other
buildings in the city of Boston.
 
  Capital Budgets. Unicom Thermal has forecasted capital expenditures for the
years 1996-98 of approximately $100 million, primarily representing the
construction costs of its district cooling facilities in the city of Chicago.
Construction of its first district cooling facility was completed in May 1995
and cost approximately $30 million. Unicom Thermal began construction on two
additional cooling facilities in 1995. As of December 31, 1995, Unicom
Thermal's purchase commitments, principally related to construction, were
approximately $21 million.
 
  Capital Resources. Unicom expects to obtain funds to invest in its
unregulated subsidiaries principally from dividends received on its ComEd
common stock and from bank borrowings. While the amount of dividends on ComEd
common stock is expected to be greater than the amount of dividends on Unicom
common stock, the availability of such dividends is dependent on ComEd's
financial performance and cash position. Other forms of financing by ComEd of
Unicom or the unregulated subsidiaries, such as loans or additional equity
investments (none of which is expected), would be subject to the prior approval
of the ICC.
 
  Unicom Enterprises has a $200 million credit facility which will expire in
1998 of which $158 million was unused as of December 31, 1995. The credit
facility can be used by Unicom Enterprises to finance investments in
unregulated energy-related businesses and projects, including Unicom Thermal,
and for general corporate purposes. The credit facility is guaranteed by Unicom
and includes certain covenants with respect to Unicom's and Unicom Enterprises'
operations. Interest rates for borrowings under the credit facility are set at
the time of a borrowing and are based on either a prime interest rate or a
floating rate bank index plus a spread which varies with the credit rating of
ComEd's outstanding first mortgage bonds. See Note 10 of Notes to Financial
Statements for additional information regarding certain covenants with respect
to Unicom's and Unicom Enterprises' operations.
 
REGULATION
 
  ComEd and the Indiana Company are subject to state and federal regulation in
the conduct of their respective businesses, including the operations of Cotter.
Such regulation includes rates, securities
 
                                       9
<PAGE>
 
issuance, nuclear operations, environmental and other matters. Particularly in
the cases of nuclear operations and environmental matters, such regulation can
and does affect operational and capital expenditures.
 
  Rate Proceedings. ComEd's revenues, net income, cash flows and plant carrying
costs have been affected directly by various rate-related proceedings. During
1993, ComEd was involved in a number of proceedings concerning its rates. The
uncertainties associated with such proceedings and related issues, among other
things, led to the Rate Matters Settlement and the Fuel Matters Settlement in
late 1993 (see Note 2 of Notes to Financial Statements). The effects of such
settlements during 1993 and 1994 are discussed below under "Results of
Operations."
 
  On January 9, 1995, the ICC issued its Rate Order in the proceedings relating
to ComEd's February 1994 rate increase request. The Rate Order provides, among
other things, for (i) an increase in ComEd's total revenues of approximately
$301.8 million (excluding add-on revenue taxes) or 5.2%, on an annual basis,
including a $303.2 million increase in base rates, (ii) the collection of
municipal franchise costs as an adder to base rates until May 1, 1995, when
ComEd began collecting such costs prospectively on an individual municipality
basis through a rider, and (iii) the use of a rider, with annual review
proceedings, to pass on to ratepayers increases or decreases in estimated costs
associated with the decommissioning of ComEd's nuclear generating units. See
"Depreciation and Decommissioning" in Note 1 of Notes to Financial Statements
for information related to the level of decommissioning cost collections
allowed in the Rate Order and subsequent rider proceedings. The ICC also
determined that the Units were 100% "used and useful" and that the previously
determined reasonable costs of such Units, as depreciated, should be included
in full in ComEd's rate base. The rates provided in the Rate Order became
effective on January 14, 1995; however, they are being collected subject to
refund as a result of subsequent judicial action. As of December 31, 1995,
electric operating revenues of approximately $319 million (excluding revenue
taxes) are subject to refund. Intervenors and ComEd have filed appeals of the
Rate Order with the Illinois Appellate Court.
 
  Nuclear Matters. During the past several years, the NRC has placed two of
ComEd's nuclear generating stations, Zion station and Dresden station, on its
list of plants to be monitored closely. Although Zion station (which was placed
on the list in early 1991) was removed from that list in February 1993, Dresden
station (which was placed on the list in early 1992) remains on the list. In
June 1995, the NRC reported that over the past year performance at Dresden was
cyclical; that plant material condition needed to be improved at Dresden and
that a more effective work management system was needed to deal with the
corrective maintenance backlog. In January 1996, the NRC noted improvement but
indicated that certain of the same concerns continue to exist. The NRC also
stated that the effectiveness of the recent improvement efforts must be
sustained. In January 1994, ComEd was notified by the NRC that ComEd's LaSalle
County and Quad-Cities stations were placed on the list of plants with adverse
performance trends. ComEd was informed that the NRC concerns about LaSalle
County station included, among other matters, deficient radiation worker
practices, and that concerns with Quad-Cities station included, among other
matters, deficiencies in the condition of certain station equipment and the
effectiveness of the operators of the units in identifying and responding to
certain operational problems. In February and June 1995, the NRC concluded that
LaSalle County and Quad-Cities, respectively, had arrested the adverse trends
in most areas and "normal" designation has been reestablished.
 
  Because of the age of Zion, Dresden and Quad-Cities stations, ComEd
anticipates continued expenditures in order to improve reliability and to meet
NRC regulatory expectations. Beginning in late 1992, ComEd restructured its
management of its nuclear operations division and since that time has committed
additional resources to the stations' operations. In addition, generating
station availability and performance during a year may be issues in fuel
reconciliation proceedings in assessing the prudence of fuel and power
purchases during such year. Final ICC orders have been issued in fuel
reconciliation
 
                                       10
<PAGE>
 
proceedings for years prior to 1994; however, certain intervenors have appealed
the ICC order in the 1989 fuel reconciliation proceedings on issues relating to
nuclear station performance.
 
  ComEd estimates that it will expend approximately $15 billion, excluding any
contingency allowance, for decommissioning costs primarily during the period
from 2007 through 2032. Such costs, which are estimated to aggregate $3.7
billion in current-year (1996) dollars, are expected to be funded by external
decommissioning trusts which ComEd established in compliance with Illinois law
and into which ComEd has been making annual contributions. Future
decommissioning cost estimates may be significantly affected by the adoption of
or changes to NRC regulations as well as changes in the assumptions used in
making such estimates. See Note 1 of Notes to Financial Statements under
"Depreciation and Decommissioning" for additional information regarding
decommissioning costs.
 
  Environmental Matters. ComEd is involved in administrative and legal
proceedings concerning air quality, water quality and other matters. The
outcome of these proceedings may require increases in future construction
expenditures and operating expenses and changes in operating procedures. See
Note 21 of Notes to Financial Statements for information regarding certain
effects of CERCLA on ComEd.
 
RESULTS OF OPERATIONS
 
  Unicom's earnings per common share were $2.98 in 1995, $1.66 in 1994 and
$0.22 in 1993. Substantially all of the results of operations for Unicom are
the results of operations for ComEd. The results of Unicom's unregulated
subsidiaries are not material to the results of Unicom and subsidiary companies
as a whole. As such, the following section discusses the results of operations
for ComEd alone.
 
  Net Income. The 1995 results reflect higher revenues primarily as a result of
higher kilowatthour sales and the higher rate levels which became effective in
January 1995 under the Rate Order. The higher kilowatthour sales reflect the
unusually hot summer weather in 1995. The 1995 results were also affected by
higher operation and maintenance expenses, which reflect an after-tax charge of
$59 million or $0.27 per common share for a voluntary separation offer for
union employees who accepted and left ComEd's employ by year-end 1995 combined
with separation plans offered to selected groups of non-union employees. ComEd
also recorded an after-tax charge of $20 million or $0.09 per common share
related to the early redemption of $645 million of long-term debt.
 
  The 1994 results reflect higher revenues as a result of the favorable
comparison to 1993 in which the effects of the Rate Matters Settlement and the
Fuel Matters Settlement were recorded. The 1994 results also reflect ComEd's
increased kilowatthour sales to ultimate consumers. The effects of these items
were partially offset by higher operation and maintenance expenses, which
include an after-tax charge of $20 million or $0.09 per common share for
additional pension costs related to an early retirement offer made to certain
employees during 1994. ComEd also recorded a reduction in the carrying value of
its investments in uranium-related properties in 1994, which reduced net income
by $34 million or $0.16 per common share.
 
  The 1993 results were significantly affected by the recording of the effects
of the Rate Matters Settlement and the Fuel Matters Settlement, which reduced
1993 net income by approximately $354 million or $1.66 per common share, in
addition to the effect of the deferred recognition of revenues which ComEd had
recorded during 1993 (approximately $160 million or $0.75 per common share),
and after the partially offsetting effect of recording approximately $269
million or $1.26 per common share in deferred carrying charges, net of income
taxes, as authorized in the Remand Order. The 1993 earnings also reflect a one-
time favorable cumulative effect of $10 million or $0.05 per common share as a
result
 
                                       11
<PAGE>
 
of the adoption of SFAS No. 109, Accounting for Income Taxes. The effect of the
non-recurring items was partially offset by a higher level of kilowatthour
sales and lower operation and maintenance expenses. Excluding non-recurring
items, earnings in 1993 would have been $1.83 per common share.
 
  Kilowatthour Sales. Kilowatthour sales to ultimate consumers increased 4.6%
in 1995, 2.8% in 1994 and 4.6% in 1993 as a result of increased sales to all
classes of customers, except railroads, which decreased during each year,
reflecting progressively warmer summers (particularly in 1995) and, in 1994,
colder winter weather than in 1993. The service territory economy also improved
during 1994, which contributed to the increase in kilowatthour sales.
Kilowatthour sales including sales for resale increased 7.3% in 1995, decreased
3.0% in 1994 and increased 16.0% in 1993.
 
  Operating Revenues. ComEd's operating revenues increased $632 million in 1995
principally reflecting the higher kilowatthour sales described above and higher
rate levels under the Rate Order. Operating revenues increased $1,017 million
in 1994 principally reflecting the favorable comparison to 1993 in which the
effects of the Rate Matters Settlement and the Fuel Matters Settlement were
recorded and the increased level of kilowatthour sales to ultimate consumers
described above. The increase was partially offset by a decrease in energy
costs recovered under the fuel adjustment clause in ComEd's rates.
 
  Operating revenues decreased $766 million in 1993 principally reflecting the
recording of the effects of the Rate Matters Settlement and the Fuel Matters
Settlement, which reduced 1993 operating revenues by $1,282 million. This
reduction was partially offset by a higher level of kilowatthour sales and an
increase in energy costs recovered under the fuel adjustment clause in ComEd's
rates. See "Net Income" above and Note 2 of Notes to Financial Statements for
additional information.
 
  Fuel Costs. Changes in fuel expense for 1995, 1994 and 1993 primarily
resulted from changes in the average cost of fuel consumed, changes in the mix
of fuel sources of electric energy generated and changes in net generation of
electric energy. Fuel mix is determined primarily by system load, the costs of
fuel consumed and the availability of nuclear generating units. The cost of
fuel consumed, net generation of electric energy and fuel sources of
kilowatthour generation were as follows:
 
<TABLE>
<CAPTION>
                                                          1995    1994    1993
                                                         ------  ------  ------
   <S>                                                   <C>     <C>     <C>
   Cost of fuel consumed (per million Btu):
     Nuclear...........................................   $0.52   $0.53   $0.52
     Coal..............................................   $2.43   $2.31   $2.89
     Oil...............................................   $3.06   $2.89   $3.03
     Natural gas.......................................   $1.85   $2.27   $2.70
     Average all fuels.................................   $1.05   $1.08   $1.15
   Net generation of electric energy (millions of kilo-
    watthours).........................................  96,608  90,243  94,266
   Fuel sources of kilowatthour generation:
     Nuclear...........................................      73%     71%     75%
     Coal..............................................      24      25      23
     Oil...............................................     --        1       1
     Natural gas.......................................       3       3       1
                                                         ------  ------  ------
                                                            100%    100%    100%
                                                         ======  ======  ======
</TABLE>
 
  Under the Energy Policy Act of 1992, investor-owned electric utilities that
have purchased enrichment services from the DOE are being assessed amounts to
fund a portion of the cost for the decontamination and decommissioning of
uranium enrichment facilities owned and previously operated by the DOE. ComEd's
portion of such assessments is estimated to be approximately $15 million per
year (to be adjusted annually for inflation) to 2007. The Act provides that
such assessments are to be treated as a cost of fuel. See Note 1 of Notes to
Financial Statements under "Deferred Unrecovered Energy Costs" for information
related to the accounting for such costs.
 
                                       12
<PAGE>
 
  Fuel Supply. Compared to other utilities, ComEd has relatively low average
fuel costs as a result of its reliance predominantly on lower cost nuclear
generation. ComEd's coal costs, however, are high compared to those of other
utilities. ComEd's western coal contracts and its rail contracts for delivery
of the western coal provide for the purchase of certain coal at prices
substantially above currently prevailing market prices and ComEd has
significant purchase commitments under its contracts. In addition, as of
December 31, 1995, ComEd had unrecovered fuel costs in the form of coal
reserves of approximately $448 million. In prior years, ComEd's commitments for
the purchase of coal exceeded its requirements. Rather than take all the coal
it was required to take, ComEd agreed to purchase the coal in place in the form
of coal reserves. For additional information concerning ComEd's coal purchase
commitments, fuel reconciliation proceedings and coal reserves, see "Liquidity
and Capital Resources" above and Notes 1, 2 and 21 of Notes to Financial
Statements.
 
  Purchased Power. Amounts of purchased power are primarily affected by system
load, the availability of ComEd and the Indiana Company's generating units and
the availability and cost of power from other utilities.
 
  The number and average cost of kilowatthours purchased were as follows:
 
<TABLE>
<CAPTION>
                                                             1995   1994   1993
                                                             -----  -----  ----
   <S>                                                       <C>    <C>    <C>
   Kilowatthours (millions)................................. 2,475  2,071   644
   Cost per kilowatthour....................................  2.60c  2.86c 1.91c
</TABLE>
 
 
  Deferred Under or Overrecovered Energy Costs--Net. Fuel expenses for the
years 1995, 1994 and 1993 include the net change in under or overrecovered
allowable energy costs under ComEd's fuel adjustment clause. See "Fuel Costs"
and "Fuel Supply" above and Note 1 of Notes to Financial Statements under
"Deferred Unrecovered Energy Costs."
 
  Operation and Maintenance Expenses. ComEd's operation and maintenance
expenses increased 4% during 1995, increased 2% during 1994 and decreased 4%
during 1993. The increase in 1995 primarily reflects increased expenses for
costs related to voluntary employee separation plans, nuclear and fossil
generating stations, customer-related activities and incentive compensation
programs, partially offset by lower expenses associated with transmission and
distribution facilities, certain administrative and general costs and pensions
and other employee benefits, including postretirement health care benefits. The
increase in 1994 primarily reflects increased expenses associated with pensions
and other employee benefits, incentive compensation programs, nuclear and
fossil generating stations, and certain administrative and general costs,
partially offset by lower expenses associated with transmission and
distribution facilities. The decrease in 1993 primarily reflects decreased
expenses associated with nuclear and fossil generating stations, pension
benefits and customer-related activities, a decrease in the number of employees
and lower research costs, partially offset by higher costs of postretirement
health care benefits and the cost related to the 1993 special incentive plan
for employees. Wage increases, the effects of which are reflected in the
increases and decreases discussed below, have increased operation and
maintenance expenses during 1995 and 1994. Wages in 1993 were not increased
over 1992 levels. Operation and maintenance expenses in 1995 and 1994 include
approximately $16 million and $20 million, respectively, for wage increases.
The effects of inflation have increased operation and maintenance expenses
during the years and are also reflected in the increases and decreases
discussed below.
 
  Operation and maintenance expenses for pensions and other employee benefits,
including postretirement health care benefits, decreased $40 million in 1995,
increased $30 million in 1994 and decreased $2 million in 1993. The 1995
decrease reflects a decrease of $40 million in the provision for postretirement
health care costs, partially offset by a $25 million increase for the portion
of the costs of the voluntary employee separation plans related to
postretirement health care benefits and an increase of $9 million for certain
other employee benefits. The 1994 increase includes a $34 million increase in
 
                                       13
<PAGE>
 
pension costs related to an early retirement program offered in 1994. See
"Liquidity and Capital Resources," subcaption "Financial Condition," for
additional information regarding the employee separation plans offered in 1995
and the 1994 early retirement program. The 1993 decrease reflects a decrease in
pension benefits of $16 million which was partially offset by an increase in
postretirement health care benefits of $14 million. The increase in
postretirement health care benefits in 1993 reflects $17 million as a result of
adopting SFAS No. 106, Employers' Accounting for Postretirement Benefits Other
Than Pensions.
 
  Operation and maintenance expenses in 1995 also reflect $72 million for the
portion of the costs of the voluntary employee separation plans not related to
the postretirement health care benefits described above. See "Liquidity and
Capital Resources," subcaption "Financial Condition," above for information
regarding the employee separation plans offered in 1995.
 
  Operation and maintenance expenses associated with the nuclear generating
stations tend to be affected by the number of outages (both scheduled and non-
scheduled) of the units, during which a greater number of activities related to
inspection, maintenance and improvement are scheduled and carried out. Such
expenses increased $32 million in 1995, increased $9 million in 1994 and
decreased $74 million in 1993. The increase in 1995 is primarily due to
increased expenses related to the plant improvement efforts at Dresden and Zion
stations. The increase in 1994 is due to activities undertaken during increased
scheduled and non-scheduled outages. The decrease in 1993 includes the effects
of ComEd's cost reduction efforts, including re-engineering and process
improvements, eliminating unnecessary work and increasing the efficiency at
which the remaining work was performed. Future operation and maintenance
expenses associated with nuclear generating stations may be significantly
affected by regulatory, operational and other requirements. See "Nuclear
Matters" under "Regulation" above.
 
  Operation and maintenance expenses associated with the fossil generating
stations also tend to be affected by the number of outages in the same manner
as nuclear generating stations. Such expenses increased $8 million in 1995,
increased $4 million in 1994 and decreased $13 million in 1993. The increase in
1995 reflects the cost for the increase in scope of scheduled overhauls
partially offset by the net effect of a reduction of personnel. The increase in
1994 reflects, in part, activities undertaken during a greater number of
scheduled overhauls. The decrease in 1993 includes the effects of ComEd's cost
reduction efforts. Research costs also decreased $10 million in 1993 due to the
cost reduction efforts.
 
  Operation and maintenance expenses associated with ComEd's transmission and
distribution system decreased $3 million and $18 million in 1995 and 1994,
respectively. The decreases in 1995 and 1994 reflect the effects of ComEd's
cost containment efforts. Costs of customer-related activities, including
customer assistance and energy sales services, increased $10 million in 1995
and decreased $13 million in 1993.
 
  Operation and maintenance expenses reflect $65 million, $50 million and $36
million for employee incentive compensation plan costs related to the
achievement of certain financial performance, cost containment and operating
performance goals in 1995, 1994 and 1993, respectively.
 
  Certain administrative and general costs decreased $16 million in 1995 and
increased $12 million in 1994. The decrease in 1995 was due to a variety of
reasons including a decrease in expenses related to insurance, injuries and
damages and the provision for vacation pay liability. The increase in 1994 is
primarily due to increased provisions for injuries and damages and obsolete
materials.
 
  Depreciation. Depreciation expense increased in 1995, 1994 and 1993 as a
result of additions to plant in service. See "Depreciation and Decommissioning"
in Note 1 of Notes to Financial Statements for additional information. ComEd
also intends to seek authorization from the ICC to accelerate the depreciation
charges on its nuclear generating units. See "Business and Competition" under
"Liquidity and Capital Resources."
 
                                       14
<PAGE>
 
  Interest on Debt. Changes in interest on long-term debt and notes payable for
the years 1995, 1994 and 1993 were due to changes in average interest rates and
in the amounts of long-term debt and notes payable outstanding. Changes in
interest on ComEd's long-term debt also reflected new issues of debt, the
retirement and early redemption of debt, and the retirement and redemption of
issues which were refinanced at generally lower rates of interest. The average
amounts of ComEd's long-term debt and notes payable outstanding and average
interest rates thereon were as follows:
 
<TABLE>
<CAPTION>
                                                          1995    1994    1993
                                                         ------  ------  ------
   <S>                                                   <C>     <C>     <C>
   Long-term debt outstanding:
    Average amount (millions)..........................  $7,528  $7,934  $8,105
    Average interest rate..............................    7.78%   7.83%   8.03%
   Notes payable outstanding:
    Average amount (millions)..........................  $   51  $    9  $    6
    Average interest rate..............................    6.40%   6.48%   5.83%
</TABLE>
 
  Deferred Carrying Charges. In the Remand Order, the ICC provided that, for
ratemaking purposes, deferred carrying charges on the reasonable and "used and
useful" plant costs of the Units for the period April 1, 1989 until
approximately March 20, 1991, the date under the Remand Order that the Units
were reflected in rates, could be deferred and amortized. Approximately $438
million of such costs was capitalized as a regulatory asset in October 1993 and
resulted in an increase to net income for the year 1993 of approximately $269
million or $1.26 per common share. Amortization of deferred carrying charges
was $13 million in 1995 and 1994 and was $2 million in 1993.
 
  Decommissioning. The staff of the SEC has questioned certain of the current
accounting practices of the electric utility industry, including ComEd,
regarding the recognition, measurement and classification of decommissioning
costs for nuclear generating stations in financial statements of electric
utilities. In response to these questions, the FASB is reviewing the accounting
for nuclear decommissioning costs. If current electric utility industry
accounting practices for such decommissioning costs are changed, annual
provisions for decommissioning could increase and the estimated cost for
decommissioning could be recorded as a liability rather than as accumulated
depreciation. Unicom does not believe that such changes, if required, would
have an adverse effect on results of operations due to ComEd's current and
future ability to recover decommissioning costs through rates.
 
  Investments in Uranium-Related Properties. In May 1994, ComEd recorded a
reduction in the carrying value of its investments in uranium-related
properties after completing a review of various alternatives and reassessing
the long-term recoverability of those investments. The effects of the reduction
reduced 1994 net income by $34 million or $0.16 per common share.
 
  Other Items. The amounts of AFUDC reflect changes in the average levels of
investment subject to AFUDC and changes in the average annual capitalization
rates as discussed in Note 1 of Notes to Financial Statements. AFUDC does not
contribute to the current cash flow of Unicom or ComEd.
 
  ComEd's ratios of earnings to fixed charges for the years 1995, 1994 and 1993
were 2.79, 1.99 and 1.19, respectively. ComEd's ratios of earnings to fixed
charges and preferred and preference stock dividend requirements for the years
1995, 1994 and 1993 were 2.39, 1.73 and 1.03, respectively.
 
  Business corporations in general have been adversely affected by inflation
because amounts retained after the payment of all costs have been inadequate to
replace, at increased costs, the productive assets consumed. Electric utilities
in particular have been especially affected as a result of their capital
intensive nature and regulation which limits capital recovery and prescribes
installation or modification of facilities to comply with increasingly
stringent safety and environmental requirements. Because the regulatory process
limits the amount of depreciation expense included in ComEd's revenue allowance
to the original cost of utility plant investment, the resulting cash flows are
inadequate to provide for replacement of that investment in future years or
preserve the purchasing power of common equity capital previously invested.
 
                                       15
<PAGE>
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To the Shareholders of Unicom Corporation:
 
  We have audited the accompanying consolidated balance sheets and statements
of consolidated capitalization of Unicom Corporation (an Illinois corporation)
and subsidiary companies as of December 31, 1995 and 1994, and the related
statements of consolidated income, retained earnings and cash flows for each of
the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
  We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
  In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Unicom Corporation and
subsidiary companies as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
 
                                          Arthur Andersen LLP
 
Chicago, Illinois
January 26, 1996
 
                                       16
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                       STATEMENTS OF CONSOLIDATED INCOME
 
  The following Statements of Consolidated Income for the years 1995, 1994 and
1993 reflect the results of past operations and are not intended as any
representation as to results of operations for any future period. Future
operations will necessarily be affected by various and diverse factors and
developments, including changes in electric rates, population, business
activity, competition, taxes, environmental control, energy use, fuel supply,
cost of labor, fuel and purchased power and other matters, the nature and
effect of which cannot now be determined.
 
<TABLE>
<CAPTION>
                                               1995        1994        1993
                                            ----------  ----------  -----------
                                            (THOUSANDS EXCEPT PER SHARE DATA)
<S>                                         <C>         <C>         <C>
Operating Revenues:
  Operating revenues......................  $6,910,045  $6,293,430  $ 6,547,205
  Provisions for revenue refunds..........         --      (15,909)  (1,286,765)
                                            ----------  ----------  -----------
                                            $6,910,045  $6,277,521  $ 5,260,440
                                            ----------  ----------  -----------
Operating Expenses and Taxes:
  Fuel....................................  $1,087,109  $1,051,793  $ 1,169,178
  Purchased power.........................      64,378      59,123       12,303
  Operation and maintenance...............   2,175,439   2,094,655    2,039,403
  Depreciation............................     898,035     887,466      862,766
  Recovery of regulatory assets...........      15,272      15,453        5,235
  Taxes (except income)...................     833,356     787,796      701,913
  Income taxes............................     526,567     326,744       95,251
  Investment tax credits deferred--net....     (28,710)    (28,757)     (29,424)
                                            ----------  ----------  -----------
                                            $5,571,446  $5,194,273  $ 4,856,625
                                            ----------  ----------  -----------
Operating Income..........................  $1,338,599  $1,083,248  $   403,815
                                            ----------  ----------  -----------
Other Income and (Deductions):
  Interest on long-term debt..............  $ (587,438) $ (621,225) $  (651,181)
  Interest on notes payable...............      (3,280)       (557)        (334)
  Allowance for funds used during
   construction--
    Borrowed funds........................      11,137      18,912       16,930
    Equity funds..........................      13,129      22,628       20,618
  Income taxes applicable to nonoperating
   activities.............................       5,085      27,074       30,705
  Deferred carrying charges...............         --          --       438,183
  Interest and other costs for 1993
   Settlements............................         (61)    (21,464)     (98,674)
  Provision for dividends on--
    Preferred and preference stocks of
     ComEd................................     (69,961)    (64,927)     (66,052)
    ComEd-obligated mandatorily redeemable
     preferred securities of subsidiary
     trust................................      (4,428)        --           --
  Miscellaneous--net......................     (43,249)    (88,755)     (57,360)
                                            ----------  ----------  -----------
                                            $ (679,066) $ (728,314) $  (367,165)
                                            ----------  ----------  -----------
Net Income Before Extraordinary Item and
 Cumulative Effect of Change in Accounting
 for Income Taxes.........................  $  659,533  $  354,934  $    36,650
Extraordinary Loss Related to Early
 Redemption of Long-Term Debt, Less
 Applicable Income Taxes..................     (20,022)        --           --
Cumulative Effect of Change in Accounting
 for Income Taxes.........................         --          --         9,738
                                            ----------  ----------  -----------
Net Income................................  $  639,511  $  354,934  $    46,388
                                            ==========  ==========  ===========
Average Number of Common Shares
 Outstanding..............................     214,691     214,031      213,508
Earnings Per Common Share Before
 Extraordinary Item and Cumulative Effect
 of Change in Accounting for Income Taxes.  $     3.07  $     1.66  $      0.17
Extraordinary Loss Related to Early
 Redemption of Long-Term Debt, Less
 Applicable Income Taxes..................       (0.09)        --           --
Cumulative Effect of Change in Accounting
 for Income Taxes.........................         --          --          0.05
                                            ----------  ----------  -----------
Earnings Per Common Share.................  $     2.98  $     1.66  $      0.22
                                            ==========  ==========  ===========
Cash Dividends Declared Per Common Share..  $     1.60  $     1.60  $      1.60
</TABLE>
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       17
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                            DECEMBER 31
                                                      ------------------------
                       ASSETS                            1995         1994
                       ------                         -----------  -----------
                                                      (THOUSANDS OF DOLLARS)
<S>                                                   <C>          <C>
Utility Plant:
  Plant and equipment, at original cost (includes
   construction work in progress of $1,105 million
   and $1,043 million, respectively)................. $27,052,778  $26,257,665
  Less--Accumulated provision for depreciation.......  10,565,093    9,623,756
                                                      -----------  -----------
                                                      $16,487,685  $16,633,909
  Nuclear fuel, at amortized cost....................     734,667      689,424
                                                      -----------  -----------
                                                      $17,222,352  $17,323,333
                                                      -----------  -----------
Investments and Other Property:
  Nuclear decommissioning funds...................... $ 1,237,527  $   880,944
  Subsidiary companies...............................     113,657      118,051
  Other, at cost.....................................      96,937       41,292
                                                      -----------  -----------
                                                      $ 1,448,121  $ 1,040,287
                                                      -----------  -----------
Current Assets:
  Cash............................................... $     3,575  $     1,927
  Temporary cash investments.........................      47,801       75,008
  Other cash investments.............................          --       19,588
  Special deposits...................................       3,546       29,603
  Receivables--
    Customers........................................     580,254      463,386
    Taxes............................................      82,319       36,083
    Other............................................      83,151       67,389
    Provisions for uncollectible accounts............     (11,828)     (10,720)
  Coal and fuel oil, at average cost.................     129,176      108,872
  Materials and supplies, at average cost............     333,539      384,612
  Deferred unrecovered energy costs..................      46,028       48,697
  Deferred income taxes related to current assets and
   liabilities--
    Loss carryforward................................          --       10,090
    Other............................................     107,991      110,267
  Prepayments and other..............................      45,272       57,050
                                                      -----------  -----------
                                                      $ 1,450,824  $ 1,401,852
                                                      -----------  -----------
Deferred Charges and Other Noncurrent Assets:
  Regulatory assets.................................. $ 2,467,386  $ 2,604,270
  Unrecovered energy costs...........................     588,152      643,438
  Other..............................................      70,153      108,308
                                                      -----------  -----------
                                                      $ 3,125,691  $ 3,356,016
                                                      -----------  -----------
                                                      $23,246,988  $23,121,488
                                                      ===========  ===========
</TABLE>
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       18
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                              DECEMBER 31
                                                        -----------------------
            CAPITALIZATION AND LIABILITIES                 1995        1994
            ------------------------------              ----------- -----------
                                                        (THOUSANDS OF DOLLARS)
<S>                                                     <C>         <C>
Capitalization (see accompanying statements):
  Common stock equity.................................. $ 5,769,637 $ 5,448,127
  Preferred and preference stocks of ComEd--
    Without mandatory redemption requirements..........     508,034     508,147
    Subject to mandatory redemption requirements.......     261,475     292,163
  ComEd-obligated mandatorily redeemable preferred
   securities of subsidiary trust*.....................     200,000         --
  Long-term debt.......................................   6,549,335   7,453,206
                                                        ----------- -----------
                                                        $13,288,481 $13,701,643
                                                        ----------- -----------
Current Liabilities:
  Notes payable--
    Commercial paper................................... $   261,000 $       --
    Bank loans.........................................       7,150       7,150
  Current portion of long-term debt, redeemable
   preference stock and capitalized lease obligations
    of subsidiary companies............................     434,563     560,545
  Accounts payable.....................................     606,806     351,081
  Accrued interest.....................................     171,488     182,622
  Accrued taxes........................................     215,966     206,973
  Dividends payable....................................     102,497     102,647
  Customer deposits....................................      44,521      44,514
  Other................................................      93,841      85,845
                                                        ----------- -----------
                                                        $ 1,937,832 $ 1,541,377
                                                        ----------- -----------
Deferred Credits and Other Noncurrent Liabilities:
  Deferred income taxes................................ $ 4,506,043 $ 4,383,347
  Accumulated deferred investment tax credits..........     689,041     717,752
  Accrued spent nuclear fuel disposal fee and related
   interest............................................     624,191     589,757
  Obligations under capital leases of subsidiary
   companies...........................................     375,524     433,184
  Regulatory liabilities...............................     601,002     699,426
  Other................................................   1,224,874   1,055,002
                                                        ----------- -----------
                                                        $ 8,020,675 $ 7,878,468
                                                        ----------- -----------
Commitments and Contingent Liabilities (Note 21)
                                                        $23,246,988 $23,121,488
                                                        =========== ===========
</TABLE>
 
  *As described in Note 8 of Notes to Financial Statements, the sole asset of
ComEd Financing I, a subsidiary trust of ComEd, is $206.2 million principal
amount of ComEd's 8.48% subordinated deferrable interest notes due
September 30, 2035.
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       19
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                   STATEMENTS OF CONSOLIDATED CAPITALIZATION
 
<TABLE>
<CAPTION>
                                                            DECEMBER 31
                                                      ------------------------
                                                         1995         1994
                                                      -----------  -----------
                                                      (THOUSANDS OF DOLLARS)
<S>                                                   <C>          <C>
Common Stock Equity:
  Common stock, without par value--
   Outstanding--214,947,629 shares and 214,340,067
    shares, respectively............................  $ 4,916,438  $ 4,890,931
  Preference stock expense of ComEd.................       (3,694)      (3,775)
  Retained earnings.................................      856,893      560,971
                                                      -----------  -----------
                                                      $ 5,769,637  $ 5,448,127
                                                      -----------  -----------
Preferred and Preference Stocks of ComEd--
  Without Mandatory Redemption Requirements:
    Preference stock, cumulative, without par
     value--
     Outstanding--13,499,549 shares.................  $   504,957  $   504,957
    $1.425 convertible preferred stock, cumulative,
     without par value--
     Outstanding--96,753 shares and 100,323 shares,
      respectively..................................        3,077        3,190
    Prior preferred stock, cumulative, $100 par
     value per share--
     No shares outstanding..........................          --           --
                                                      -----------  -----------
                                                      $   508,034  $   508,147
                                                      -----------  -----------
  Subject to Mandatory Redemption Requirements:
    Preference stock, cumulative, without par
     value--
     Outstanding--2,934,990 shares and 3,113,205
      shares, respectively..........................  $   292,163  $   309,964
    Current redemption requirements for preference
     stock included
     in current liabilities.........................      (30,688)     (17,801)
                                                      -----------  -----------
                                                      $   261,475  $   292,163
                                                      -----------  -----------
ComEd-Obligated Mandatorily Redeemable Preferred
 Securities of Subsidiary Trust:
  Outstanding--8,000,000 and none, respectively.....  $   200,000  $       --
                                                      -----------  -----------
Long-Term Debt:
  First mortgage bonds:
    Maturing 1995 through 2000--5 1/4% to 9 3/8%....  $ 1,170,000  $ 1,273,000
    Maturing 2001 through 2010--5.30% to 8 3/8%.....    1,465,400    1,765,500
    Maturing 2011 through 2020--5.85% to 9 7/8%.....    1,266,000    1,591,000
    Maturing 2021 through 2023--7 3/4% to 9 1/8%....    1,385,000    1,385,000
                                                      -----------  -----------
                                                      $ 5,286,400  $ 6,014,500
  Sinking fund debentures, due 1999 through 2011--
   2 3/4% to 7 5/8%.................................      110,505      112,593
  Pollution control obligations, due 2004 through
   2014--4.434% to 9 1/8%...........................      317,200      337,200
  Other long-term debt..............................    1,126,318    1,451,449
  Current maturities of long-term debt included in
   current liabilities..............................     (235,992)    (395,554)
  Unamortized net debt discount and premium.........      (55,096)     (66,982)
                                                      -----------  -----------
                                                      $ 6,549,335  $ 7,453,206
                                                      -----------  -----------
                                                      $13,288,481  $13,701,643
                                                      ===========  ===========
</TABLE>
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       20
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                  STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
 
<TABLE>
<CAPTION>
                                                      1995       1994     1993
                                                   ----------  -------- --------
                                                      (THOUSANDS OF DOLLARS)
<S>                                                <C>         <C>      <C>
Balance at Beginning of Year...................... $  560,971  $549,152 $847,186
Add--Net income...................................    639,511   354,934   46,388
                                                   ----------  -------- --------
                                                   $1,200,482  $904,086 $893,574
                                                   ----------  -------- --------
Deduct--
    Cash dividends declared on common stock....... $  343,619  $342,561 $341,683
    Other capital stock transactions--net.........        (30)      554    2,739
                                                   ----------  -------- --------
                                                   $  343,589  $343,115 $344,422
                                                   ----------  -------- --------
Balance at End of Year............................ $  856,893  $560,971 $549,152
                                                   ==========  ======== ========
</TABLE>
 
 
 
 
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       21
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                     STATEMENTS OF CONSOLIDATED CASH FLOWS
 
<TABLE>
<CAPTION>
                                            1995         1994         1993
                                         -----------  -----------  -----------
                                               (THOUSANDS OF DOLLARS)
<S>                                      <C>          <C>          <C>
Cash Flow From Operating Activities:
 Net income............................. $   639,511  $   354,934  $    46,388
 Adjustments to reconcile net income to
  net cash provided by operating
   activities:
   Depreciation and amortization........     949,413      929,365      911,139
   Deferred income taxes and investment
    tax credits--net....................     156,938      126,281       84,500
   Extraordinary loss related to early
    redemption of long-term debt........      33,158          --           --
   Cumulative effect of change in
    accounting for income taxes.........         --           --        (9,738)
   Equity component of allowance for
    funds used during construction......     (13,129)     (22,628)     (20,618)
   Provisions for revenue refunds and
    related interest....................        (231)      37,548    1,354,197
   Revenue refunds and related interest.      15,135   (1,221,650)    (190,723)
   Recovery/(deferral) of regulatory
    assets/deferred carrying charges--
    net.................................      15,272       15,453     (432,948)
   Provisions/(payments) for liability
    for early retirement and separation
    costs--net..........................      60,713       33,580       (1,816)
   Net effect on cash flows of changes
    in:
     Receivables........................    (177,758)     114,215     (157,405)
     Coal and fuel oil..................     (20,304)       2,880      215,382
     Materials and supplies.............      51,073       18,102        1,834
     Accounts payable adjusted for
      nuclear fuel lease principal
      payments and early retirement and
      separation costs--net.............     458,410      116,688      278,946
     Accrued interest and taxes.........      (2,141)      70,408      (39,234)
     Other changes in certain current
      assets and liabilities............      26,545      (55,843)      (6,637)
   Other--net...........................     139,830      134,515      109,361
                                         -----------  -----------  -----------
                                         $ 2,332,435  $   653,848  $ 2,142,628
                                         -----------  -----------  -----------
Cash Flow From Investing Activities:
 Construction expenditures.............. $  (927,327) $  (739,679) $  (842,591)
 Nuclear fuel expenditures..............    (289,118)    (257,264)    (261,370)
 Equity component of allowance for
  funds used during construction........      13,129       22,628       20,618
 Contributions to nuclear
  decommissioning funds.................    (132,653)    (132,550)    (132,550)
 Investment in subsidiary companies.....          (8)         (49)         --
 Other investments and special
  deposits..............................      (1,612)     621,987     (619,349)
                                         -----------  -----------  -----------
                                         $(1,337,589) $  (484,927) $(1,835,242)
                                         -----------  -----------  -----------
Cash Flow From Financing Activities:
 Issuance of securities--
   Long-term debt....................... $    62,000  $   546,289  $ 1,927,296
   Preferred securities of subsidiary
    trust...............................     200,000          --           --
   Capital stock........................      25,411       81,037       80,585
 Retirement and redemption of
  securities--
   Long-term debt.......................  (1,137,272)    (703,930)  (1,900,540)
   Capital stock........................     (17,822)     (17,709)     (93,081)
 Deposits and securities held for
  retirement and redemption of
  securities............................         106        3,191      241,731
 Premium paid on early redemption of
  long-term debt........................     (25,823)      (4,564)     (78,395)
 Cash dividends paid on common stock....    (343,375)    (342,322)    (341,505)
 Proceeds from sale/leaseback of
  nuclear fuel..........................     193,215      306,649      204,254
 Nuclear fuel lease principal payments..    (237,845)    (209,689)    (245,968)
 Increase in short-term borrowings......     261,000        1,200          350
                                         -----------  -----------  -----------
                                         $(1,020,405) $  (339,848) $  (205,273)
                                         -----------  -----------  -----------
Increase (Decrease) in Cash and
 Temporary Cash Investments............. $   (25,559) $  (170,927) $   102,113
Cash and Temporary Cash Investments at
 Beginning of Year......................      76,935      247,862      145,749
                                         -----------  -----------  -----------
Cash and Temporary Cash Investments at
 End of Year............................ $    51,376  $    76,935  $   247,862
                                         ===========  ===========  ===========
</TABLE>
 
   The accompanying Notes to Financial Statements are an integral part of the
                               above statements.
 
                                       22
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                         NOTES TO FINANCIAL STATEMENTS
 
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Corporate Structure and Basis of Presentation. Unicom was incorporated in
January 1994 and became the parent corporation of ComEd and Unicom Enterprises
in a corporate restructuring that became effective on September 1, 1994.
Previously, Unicom Enterprises was a wholly-owned subsidiary of ComEd. The
restructuring was accounted for by the pooling-of-interests method. Under this
method, the assets, liabilities and ownership interests of each of the
companies are combined at their existing recorded amounts as of the
restructuring date, and the financial statements are presented herein as if the
restructuring took place as of the earliest period shown. In the restructuring,
each of the 214,185,572 outstanding shares of ComEd common stock, par value
$12.50 per share, was converted into one fully paid and non-assessable share of
Unicom common stock, without par value. The preferred and preference stocks,
common stock purchase warrants, first mortgage bonds and other debt obligations
of ComEd were unchanged in the restructuring and remain as ComEd's outstanding
securities and obligations.
 
  ComEd, an electric utility, is the principal subsidiary of Unicom. Unicom
Enterprises is an unregulated subsidiary of Unicom and is engaged, through a
subsidiary, Unicom Thermal, in energy service activities. Unicom also has
several other subsidiaries that have been formed to engage in unregulated
activities.
 
  The consolidated financial statements include the accounts of Unicom, ComEd,
the Indiana Company, ComEd Financing I and Unicom's unregulated subsidiaries.
All significant intercompany transactions have been eliminated. ComEd's
investments in other subsidiary companies, which are not material in relation
to ComEd's financial position or results of operations, are accounted for in
accordance with the equity method of accounting.
 
  Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Regulation. ComEd is subject to regulation as to accounting and ratemaking
policies and practices by the ICC and FERC. ComEd's accounting policies and the
accompanying consolidated financial statements conform to generally accepted
accounting principles applicable to rate-regulated enterprises and reflect the
effects of the ratemaking process in accordance with SFAS No. 71, Accounting
for the Effects of Certain Types of Regulation. Such effects concern mainly the
time at which various items enter into the determination of net income in order
to follow the principle of matching costs and revenues.
 
                                       23
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                   NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  Regulatory Assets and Liabilities. Regulatory assets are incurred costs
which have been deferred and are amortized for ratemaking and accounting
purposes. Regulatory liabilities represent amounts to be settled with
customers through future rates. Regulatory assets and liabilities reflected on
the Consolidated Balance Sheets at December 31, 1995 and 1994 were as follows:
 
<TABLE>
<CAPTION>
                                                                DECEMBER 31
                                                           ---------------------
                                                              1995       1994
                                                           ---------- ----------
                                                               (THOUSANDS OF
                                                                 DOLLARS)
<S>                                                        <C>        <C>
Regulatory assets:
  Deferred income taxes (1)............................... $1,689,832 $1,791,395
  Deferred carrying charges (2)...........................    409,923    422,966
  Nuclear decommissioning costs--Dresden Unit 1 (3).......    138,058    141,405
  Unamortized loss on reacquired debt (4).................    160,440    176,128
  Other...................................................     69,133     72,376
                                                           ---------- ----------
                                                           $2,467,386 $2,604,270
                                                           ========== ==========
Regulatory liabilities:
  Deferred income taxes (1)............................... $  601,002 $  650,813
  Other...................................................        --      48,613
                                                           ---------- ----------
                                                           $  601,002 $  699,426
                                                           ========== ==========
</TABLE>
--------
(1) Recorded in compliance with SFAS No. 109.
(2) Amortized over the remaining lives of the Units.
(3) Amortized over the remaining life of Dresden station. See "Depreciation
    and Decommissioning" below for additional information.
(4) Amortized over the remaining lives of the long-term debt issued to finance
    the reacquisition. See "Loss on Reacquired Debt" below for additional
    information.
 
For additional information related to deferred carrying charges, see "Deferred
Carrying Charges" under the subcaption "Results of Operations" in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." See also "Deferred Unrecovered Energy Costs" below regarding the
fuel adjustment clause, the DOE assessment and coal reserves.
 
  If a portion of ComEd's operations was no longer subject to the provisions
of SFAS No. 71 as a result of a change in regulation or the effects of
competition, ComEd would be required to write off the related regulatory
assets and liabilities. In addition, ComEd would be required to determine any
impairment to other assets and write down such assets to their fair value.
 
  SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which will be adopted on January 1, 1996,
establishes accounting standards for the impairment of long-lived assets. The
SFAS also requires that regulatory assets which are no longer probable of
recovery through future revenue be charged to earnings. SFAS No. 121 is not
expected to have an impact on ComEd's financial position or results of
operations upon adoption.
 
  Customer Receivables and Revenues. ComEd is engaged principally in the
production, purchase, transmission, distribution and sale of electricity to a
diverse base of residential, commercial and industrial customers. ComEd's
electric service territory has an area of approximately 11,540 square miles
and an estimated population of approximately eight million as of December 31,
1995, 1994 and 1993. It includes the city of Chicago, an area of about 225
square miles with an estimated population of approximately three million from
which ComEd derived approximately one-third of its ultimate consumer revenues
in 1995. ComEd had approximately 3.4 million electric customers at December
31, 1995.
 
  Depreciation and Decommissioning. ComEd's depreciation is provided on the
straight-line basis by amortizing the cost of depreciable plant and equipment
over estimated composite service lives. Non-nuclear plant and equipment is
depreciated at annual rates developed for each class of plant based on
 
                                      24
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
their composite service lives. Provisions for depreciation were at average
annual rates of 3.14%, 3.13% and 3.12% of average depreciable utility plant and
equipment for the years 1995, 1994 and 1993, respectively. The annual rate for
nuclear plant and equipment is 2.88%, which excludes separately collected
decommissioning costs. See Note 3 for additional information concerning ComEd's
announcement of customer initiatives which include the acceleration of
depreciation charges on nuclear generating units.
 
  Nuclear plant decommissioning costs are accrued over the expected service
lives of the related nuclear generating units. The accrual is based on an
annual levelized cost of the unrecovered portion of estimated decommissioning
costs which are escalated for expected inflation to the expected time of
decommissioning and are net of expected earnings on the trust funds. See
"Decommissioning" under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," subcaption "Results of Operations," for a
discussion of questions raised by the staff of the SEC and a FASB review
regarding the electric utility industry method of accounting for
decommissioning costs. Dismantling is expected to occur relatively soon after
the end of the useful life of each related generating station. The accrual for
decommissioning is based on the prompt removal method authorized by NRC
guidelines. ComEd's twelve operating units have estimated remaining service
lives ranging from 10 to 32 years. ComEd's first nuclear unit, Dresden Unit 1,
is retired and will be dismantled upon the retirement of the remaining units at
that station, which is consistent with the regulatory treatment for the related
decommissioning costs.
 
  Based on ComEd's most recent study, decommissioning costs, including the cost
of decontamination and dismantling, are estimated to aggregate $3.7 billion in
current-year (1996) dollars excluding a contingency allowance. ComEd estimates
that it will expend approximately $15 billion, excluding any contingency
allowance, for decommissioning costs primarily during the period from 2007
through 2032. Such costs are expected to be funded by the external
decommissioning trusts which ComEd established in compliance with Illinois law
and into which ComEd has been making annual contributions. Future
decommissioning cost estimates may be significantly affected by the adoption of
or changes to NRC regulations as well as changes in the assumptions used in
making such estimates.
 
  On January 9, 1995, the ICC issued its Rate Order in the proceedings relating
to ComEd's February 1994 rate increase request. In the Rate Order, the ICC
determined that ComEd's annual nuclear plant decommissioning cost collections
from its ratepayers should be reduced from the $127 million previously
authorized in the 1991 ICC rate order to $112.7 million. The $112.7 million
annual collection amount primarily resulted from the ICC's decision to exclude
from ComEd's costs subject to collection a contingency allowance. Contingency
allowances used in decommissioning cost estimates provide for currently
unspecifiable costs that are likely to occur after decommissioning begins and
generally range from 20% to 25% of the currently specifiable costs. However,
the Rate Order established a rider which will allow annual adjustments to
decommissioning cost collections outside of the context of a traditional rate
proceeding. Such rider is intended to allow adjustments in decommissioning cost
recoveries from ratepayers as changes in cost estimates occur. On February 28,
1995, ComEd submitted its initial rider filing to the ICC to increase its
annual collections to $113.5 million, primarily reflecting additional
expenditures at Dresden Unit 1, its retired nuclear unit. The ICC approved the
rider filing on April 19, 1995.
 
  As a result of the decommissioning rider filing, beginning May 2, 1995, the
effective date of the order related to the rider filing, ComEd began collecting
and accruing $113.5 million annually for decommissioning costs. The assumptions
used to calculate the $113.5 million decommissioning cost accrual include: the
decommissioning cost estimate of $3.7 billion in current-year (1996) dollars,
after-tax earnings on the tax-qualified and nontax-qualified decommissioning
funds of 7.30% and 6.26%,
 
                                       25
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
respectively, as well as an escalation rate for future decommissioning costs of
5.3%. The annual accrual of $113.5 million provided over the lives of the
nuclear plants, coupled with the expected fund earnings and amounts previously
recovered in rates, is expected to aggregate approximately $15 billion.
 
  For the twelve operating nuclear units, decommissioning costs are recorded as
portions of depreciation expense and accumulated provision for depreciation on
the Statements of Consolidated Income and the Consolidated Balance Sheets,
respectively. As of December 31, 1995, the total decommissioning costs included
in the accumulated provision for depreciation were $1,301 million. For ComEd's
retired nuclear unit, Dresden Unit 1, the total estimated liability at December
31, 1995 in current-year (1996) dollars of $257 million was recorded on the
Consolidated Balance Sheets as a noncurrent liability and the unrecovered
portion of the liability of approximately $138 million was recorded as a
regulatory asset.
 
  Under Illinois law, decommissioning cost collections are required to be
deposited into external trusts; and, consequently, such collections do not add
to the cash flows available for general corporate purposes. The ICC has
approved ComEd's funding plan which provides for annual contributions of
current accruals and ratable contributions of past accruals over the remaining
service lives of the nuclear plants. At December 31, 1995, the past accruals
that are required to be contributed to the external trusts aggregate $182
million. The fair value of funds accumulated in the external trusts at December
31, 1995 was approximately $1,238 million which includes pre-tax unrealized
appreciation of $165 million. The earnings on the external trusts accumulate in
the fund balance and in the accumulated provision for depreciation.
 
  Amortization of Nuclear Fuel. The cost of nuclear fuel is amortized to fuel
expense based on the quantity of heat produced using the unit of production
method. As authorized by the ICC, provisions for spent nuclear fuel disposal
costs have been recorded at a level required to recover the fee payable on
current nuclear-generated and sold electricity and the current interest accrual
on the one-time fee payable to the DOE for nuclear generation prior to April 7,
1983. The one-time fee and interest thereon have been recovered and the current
fee and current interest on the one-time fee are currently being recovered
through the fuel adjustment clause. See Note 11 for further information
concerning the disposal of spent nuclear fuel, the one-time fee and the current
interest accrual on the one-time fee. Nuclear fuel expenses, including leased
fuel costs and provisions for spent nuclear fuel disposal costs, for the years
1995, 1994 and 1993 were $390.7 million, $358.0 million and $385.9 million,
respectively.
 
  Income Taxes. Deferred income taxes are provided for income and expense items
recognized for financial accounting purposes in periods that differ from those
for income tax purposes. Income taxes deferred in prior years are charged or
credited to income as the book/tax timing differences reverse. Prior years'
deferred investment tax credits are amortized through credits to income
generally over the lives of the related property. Income tax credits resulting
from interest charges applicable to nonoperating activities, principally
construction, are classified as other income.
 
  AFUDC. In accordance with the uniform systems of accounts prescribed by
regulatory authorities, ComEd capitalizes AFUDC, compounded semiannually, which
represents the estimated cost of funds used to finance its construction
program. The equity component of AFUDC is recorded on an after-tax basis and
the borrowed funds component of AFUDC is recorded on a pre-tax basis. The
average annual capitalization rates for the years 1995, 1994 and 1993 were
9.52%, 9.85% and 10.05%, respectively. AFUDC does not contribute to the current
cash flow of Unicom or ComEd.
 
  Interest. Total interest costs incurred on debt, leases and other obligations
for the years 1995, 1994 and 1993 were $695.8 million, $729.8 million and
$778.7 million, respectively.
 
                                       26
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  Debt Discount, Premium and Expense. Discount, premium and expense on long-
term debt of subsidiary companies are being amortized over the lives of the
respective issues.
 
  Loss on Reacquired Debt. Consistent with regulatory treatment, the net loss
from ComEd's reacquisition in connection with refinancing of first mortgage
bonds, sinking fund debentures and pollution control obligations prior to their
scheduled maturity dates is deferred and amortized over the lives of the long-
term debt issued to finance the reacquisition.
 
  Deferred Unrecovered Energy Costs. The fuel adjustment clause adopted by the
ICC provides for the recovery of changes in fossil and nuclear fuel costs and
the energy portion of purchased power costs as compared to the fuel and
purchased energy costs included in ComEd's base rates. As authorized by the
ICC, ComEd has recorded under or overrecoveries of allowable fuel and energy
costs which, under the clause, are recoverable or refundable in subsequent
months. Deferred unrecovered energy costs also include amounts to be recovered
through the fuel adjustment clause for assessments by the DOE to fund a portion
of the cost for the decontamination and decommissioning of uranium enrichment
facilities owned and previously operated by the DOE. As of December 31, 1995
and 1994, an asset related to the assessments of approximately $179 million and
$191 million, respectively, was recorded, of which the current portion of
approximately $15 million was included in current assets on the Consolidated
Balance Sheets. As of December 31, 1995 and 1994, a corresponding liability of
approximately $152 million and $165 million, respectively, was recorded in
other noncurrent liabilities and approximately $15 million was recorded in
other current liabilities.
 
  At December 31, 1995 and 1994, ComEd had unrecovered fuel costs in the form
of coal reserves of approximately $448 million and $498 million, respectively.
In prior years, ComEd's commitments for the purchase of coal exceeded its
requirements. Rather than take all the coal it was required to take, ComEd
agreed to purchase the coal in place in the form of coal reserves. ComEd has
been allowed to recover from its customers the costs of the coal reserves
through its fuel adjustment clause as the coal is used for the generation of
electricity; however, ComEd is not earning a return on the expenditures for
coal reserves. Such fuel costs expected to be recovered within one year
amounting to approximately $24 million and $31 million at December 31, 1995 and
1994, respectively, have been included on the Consolidated Balance Sheets in
current assets as deferred unrecovered energy costs. ComEd expects to fully
recover the costs of the coal reserves by the year 2007. See Note 21 for
additional information concerning ComEd's coal commitments.
 
  Reclassifications. Certain prior year amounts have been reclassified to
conform with current period presentation. These reclassifications had no effect
on net income.
 
  Statements of Consolidated Cash Flows. For purposes of the Statements of
Consolidated Cash Flows, temporary cash investments, generally investments
maturing within three months at the time of purchase, are considered to be cash
equivalents. Supplemental cash flow information for the years 1995, 1994 and
1993 was as follows:
 
<TABLE>
<CAPTION>
                                                     1995     1994      1993
                                                   -------- --------  --------
                                                     (THOUSANDS OF DOLLARS)
<S>                                                <C>      <C>       <C>
Supplemental Cash Flow Information:
 Cash paid during the year for:
   Interest (net of amount capitalized)........... $604,932 $645,658  $677,682
   Income taxes (net of refunds).................. $367,708 $ (4,923) $103,014
Supplemental Schedule of Non-Cash Investing and
 Financing Activities:
 Capital lease obligations incurred by subsidiary
  companies....................................... $198,577 $309,716  $215,751
</TABLE>
 
                                       27
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
(2) SETTLEMENTS RELATING TO CERTAIN RATE MATTERS
 
  Under the Rate Matters Settlement, effective as of November 4, 1993, ComEd
reduced its rates by approximately $339 million annually and refunded
approximately $1.26 billion (including revenue taxes), plus interest at five
percent on the unpaid balance, through temporarily reduced rates over a refund
period which ended in November 1994 (followed by a reconciliation period of
five months). ComEd had previously deferred the recognition of revenues during
1993 as a result of developments in the proceedings related to a 1991 ICC rate
order, which resulted in a reduction to 1993 net income of approximately $160
million or $0.75 per common share. The recording of the effects of the Rate
Matters Settlement in October 1993 reduced 1993 net income by approximately
$292 million or $1.37 per common share, in addition to the approximately $160
million effect of the deferred recognition of revenues and after the partially
offsetting effect of recording approximately $269 million or $1.26 per common
share in deferred carrying charges, net of income taxes, authorized in the
Remand Order.
 
  Under the Fuel Matters Settlement, effective as of December 2, 1993, ComEd
paid approximately $108 million (including revenue taxes) to its customers
through temporarily reduced collections under its fuel adjustment clause over a
twelve-month period which ended in November 1994. The recording of the effects
of the Fuel Matters Settlement in October 1993 reduced 1993 net income by
approximately $62 million or $0.29 per common share.
 
(3) OTHER RATE MATTERS
 
  On January 9, 1995, the ICC issued its Rate Order in the proceedings relating
to ComEd's February 1994 rate increase request. The Rate Order provides, among
other things, for (i) an increase in ComEd's total revenues of approximately
$301.8 million (excluding add-on revenue taxes) or 5.2%, on an annual basis,
including a $303.2 million increase in base rates, (ii) the collection of
municipal franchise costs as an adder to base rates until May 1, 1995, when
ComEd began collecting such costs prospectively on an individual municipality
basis through a rider, and (iii) the use of a rider, with annual review
proceedings, to pass on to ratepayers increases or decreases in estimated costs
associated with the decommissioning of ComEd's nuclear generating units. See
Note 1 under "Depreciation and Decommissioning" for information related to the
level of decommissioning cost collections allowed in the Rate Order and
subsequent rider proceedings. The ICC also determined that the Units were 100%
"used and useful" and that the previously determined reasonable costs of such
Units, as depreciated, should be included in full in ComEd's rate base. The
rates provided in the Rate Order became effective on January 14, 1995; however,
they are being collected subject to refund as a result of subsequent judicial
action. As of December 31, 1995, electric operating revenues of approximately
$319 million (excluding revenue taxes) are subject to refund. Intervenors and
ComEd have filed appeals of the Rate Order with the Illinois Appellate Court.
 
  On December 11, 1995, ComEd announced a series of customer initiatives as
part of its larger ongoing effort to address the need to give all customer
classes the opportunity to benefit from increased competition in the electric
utility business, while retaining the benefits (such as reliability) of current
regulation and ensuring utilities' cost recovery for commitments made under the
obligation to serve customers. The initiatives include a five-year cap on base
electric rates at current levels and various customer service and incentive
pricing programs designed to allow customers more choice and control over the
services they seek and the prices they pay. These initiatives are in addition
to previously implemented special discount contract rate programs for new or
existing industrial customers. ComEd anticipates the initiatives will be fully
implemented in 1997 and will reduce its revenues by approximately $42 million
annually (including the effects of previously implemented initiatives and
before income tax
 
                                       28
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED

effects) primarily through changes in energy utilization and increase its costs
by at least $30 million annually (before income tax effects) through the
acceleration of depreciation charges on its nuclear generating units. ComEd
expects to file a request for ICC approval of the accelerated depreciation
initiatives in the near future. Management expects the financial impact of
these initiatives will be substantially offset by ComEd's cost reduction
efforts and expected growth in its business. ComEd also continues to consider
the possibility of additional accelerated depreciation options.
 
  Under ComEd's initiatives, the five-year base rate cap at current levels
became effective in December 1995 and will extend until January 1, 2001. The
rate cap does not affect ComEd's fuel cost or nuclear decommissioning cost
recovery provisions. ComEd's fuel cost variances will continue to be collected
through its fuel adjustment clause, and such collections will continue to be
subject to annual reconciliation proceedings before the ICC. Likewise, nuclear
decommissioning costs will continue to be collected as described in Note 1
under "Depreciation and Decommissioning."
 
(4) AUTHORIZED SHARES AND VOTING RIGHTS OF CAPITAL STOCK
 
  At December 31, 1995, Unicom's authorized shares consisted of 400,000,000
shares of common stock. The authorized shares of ComEd preferred and preference
stocks at December 31, 1995 were: preference stock--23,244,990 shares; $1.425
convertible preferred stock--96,753 shares; and prior preferred stock--850,000
shares. The preference and prior preferred stocks are issuable in series and
may be issued with or without mandatory redemption requirements. Holders of
outstanding Unicom shares are entitled to one vote for each share held on each
matter submitted to a vote of such shareholders; and holders of outstanding
ComEd shares are entitled to one vote for each share held on each matter
submitted to a vote of such shareholders. All such shares have the right to
cumulate votes in elections for the directors of the corporation which issued
the shares.
 
(5) COMMON STOCK
 
  At December 31, 1995, shares of Unicom common stock were reserved for the
following purposes:
 
<TABLE>
      <S>                                                              <C>
      Long-Term Incentive Plan........................................ 3,816,918
      Employee Stock Purchase Plan....................................   900,083
      Employee Savings and Investment Plan............................   273,003
      Exchange for ComEd common stock not held by Unicom..............   135,646
                                                                       ---------
                                                                       5,125,650
                                                                       =========
</TABLE>
 
  Common stock for the years 1995, 1994 and 1993 was issued as follows:
 
<TABLE>
<CAPTION>
                                                          1995    1994    1993
                                                         ------- ------- -------
<S>                                                      <C>     <C>     <C>
 Shares of Common Stock Issued:
   Long-Term Incentive Plan............................. 183,082     --      --
   Employee Stock Purchase Plan......................... 217,080 305,205 268,594
   Employee Savings and Investment Plan................. 207,400  85,400 153,400
   Conversion of $1.425 convertible preferred stock.....     --  185,041  22,375
   Conversion of warrants...............................     --   13,274   1,374
                                                         ------- ------- -------
                                                         607,562 588,920 445,743
                                                         ======= ======= =======
<CAPTION>
                                                         (THOUSANDS OF DOLLARS)
<S>                                                      <C>     <C>     <C>
 Amount of Common Stock Issued.......................... $15,446 $14,781 $12,211
                                                         ======= ======= =======
</TABLE>
 
  At December 31, 1995 and 1994, 82,742 and 83,751 ComEd common stock purchase
warrants, respectively, were outstanding. The warrants entitle the holders to
convert such warrants into common stock of ComEd at a conversion rate of one
share of common stock for three warrants.
 
 
                                       29
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED

(6) COMED PREFERRED AND PREFERENCE STOCKS WITHOUT MANDATORY REDEMPTION
REQUIREMENTS
 
  No shares of ComEd preferred or preference stocks without mandatory
redemption requirements were issued or redeemed during 1995 or 1993. During
1994, 3,000,000 shares of ComEd preference stock without mandatory redemption
requirements were issued and no shares of ComEd preferred or preference stocks
without mandatory redemption requirements were redeemed. The series of ComEd
preference stock without mandatory redemption requirements outstanding at
December 31, 1995 are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                        INVOLUNTARY
                    SHARES           AGGREGATE         REDEMPTION       LIQUIDATION
      SERIES      OUTSTANDING       STATED VALUE        PRICE(1)         PRICE(1)
      ------      -----------       ------------       ----------       -----------
                                     (THOUSANDS
                                     OF DOLLARS)
      <S>         <C>               <C>                <C>              <C>
      $1.90        4,249,549          $106,239          $ 25.25           $25.00
      $2.00        2,000,000            51,560          $ 26.04           $25.00
      $1.96        2,000,000            52,440          $ 27.11           $25.00
      $7.24          750,000            74,340          $101.00           $99.12
      $8.40          750,000            74,175          $101.00           $98.90
      $8.38          750,000            73,566          $100.16           $98.09
      $2.425       3,000,000            72,637          $ 25.00           $25.00
                  ----------          --------
                  13,499,549          $504,957
                  ==========          ========
</TABLE>
     --------
     (1) Per share plus accrued and unpaid dividends, if any.
 
  The outstanding shares of ComEd's $1.425 convertible preferred stock are
convertible at the option of the holders thereof, at any time, into common
stock of ComEd at the rate of 1.02 shares of common stock for each share of
convertible preferred stock, subject to future adjustment. The convertible
preferred stock may be redeemed by ComEd at $42 per share, plus accrued and
unpaid dividends, if any. The involuntary liquidation price of the $1.425
convertible preferred stock is $31.80 per share, plus accrued and unpaid
dividends, if any.
 
(7) COMED PREFERENCE STOCK SUBJECT TO MANDATORY REDEMPTION REQUIREMENTS
 
  During 1995 and 1994, no shares of ComEd preference stock subject to
mandatory redemption requirements were issued. During 1993, 700,000 shares of
ComEd preference stock subject to mandatory redemption requirements were
issued. The series of ComEd preference stock subject to mandatory redemption
requirements outstanding at December 31, 1995 are summarized as follows:
 
<TABLE>
<CAPTION>
                  SHARES     AGGREGATE
    SERIES      OUTSTANDING STATED VALUE            OPTIONAL REDEMPTION PRICE(1)
--------------  ----------- ------------ --------------------------------------------------
                             (THOUSANDS
                            OF DOLLARS)
<S>             <C>         <C>          <C>
$8.20              249,990    $ 24,999   $103 through October 31, 1997; and $101 thereafter
$8.40 Series B     360,000      35,758   $101
$8.85              300,000      30,000   $103 through July 31, 1998; and $101 thereafter
$9.25              675,000      67,500   $103 through July 31, 1999; and $101 thereafter
$9.00              650,000      64,431   Non-callable
$6.875             700,000      69,475   Non-callable
                 ---------    --------
                 2,934,990    $292,163
                 =========    ========
</TABLE>
--------
(1) Per share plus accrued and unpaid dividends, if any.
 
                                       30
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  The annual sinking fund requirements and sinking fund and involuntary
liquidation prices per share of the outstanding series of ComEd preference
stock subject to mandatory redemption requirements are summarized as follows:
 
<TABLE>
<CAPTION>
                                                SINKING
                        ANNUAL SINKING FUND       FUND           INVOLUNTARY
          SERIES            REQUIREMENT         PRICE(1)     LIQUIDATION PRICE(1)
      --------------    -------------------     -------      -------------------
      <S>               <C>                     <C>          <C>
      $8.20               35,715 shares          $100             $100.00
      $8.40 Series B      30,000 shares(2)       $100             $ 99.326
      $8.85               37,500 shares          $100             $100.00
      $9.25               75,000 shares          $100             $100.00
      $9.00              130,000 shares(2)       $100             $ 99.125
      $6.875                    (3)              $100             $ 99.25
</TABLE>
     --------
     (1) Per share plus accrued and unpaid dividends, if any.
     (2) ComEd has a non-cumulative option to increase the annual
         sinking fund payment on each sinking fund redemption date
         to retire an additional number of shares, not in excess of
         the sinking fund requirement, at the applicable redemption
         price.
     (3) All shares are required to be redeemed on May 1, 2000.
 
  Annual remaining sinking fund requirements through 2000 on ComEd preference
stock outstanding at December 31, 1995 will aggregate $30,822,000 in each of
1996, 1997, 1998 and 1999, and $100,822,000 in 2000. During 1995, 1994 and
1993, 178,215 shares, 177,085 shares and 1,835,155 shares, respectively, of
ComEd preference stock subject to mandatory redemption requirements were
reacquired to meet sinking fund requirements.
 
  Sinking fund requirements due within one year are included in current
liabilities.
 
  On June 28, 1993, ComEd redeemed the remaining 170,810 shares of its $2.875
Series of preference stock and all 1,050,000 shares of its $2.375 Series of
preference stock, both at the optional redemption price of $25.25 per share,
plus accrued and unpaid dividends.
 
  On November 1, 1993, ComEd redeemed the remaining 75,000 shares of its $11.70
Series of preference stock (150,000 shares had been redeemed on August 1, 1993
at the optional redemption price of $105 per share, plus accrued and unpaid
dividends). Of the remaining 75,000 shares, 37,500 shares were redeemed to meet
the November 1, 1993 mandatory sinking fund requirement and 37,500 shares were
redeemed as a permitted optional sinking fund payment, both at the sinking fund
redemption price of $100 per share, plus accrued and unpaid dividends.
 
  On November 1, 1993, ComEd redeemed all 210,000 shares of its $9.30 Series of
preference stock, of which 70,000 shares were redeemed at the optional
redemption price of $101.03 per share, plus accrued and unpaid dividends,
70,000 shares were redeemed to meet the November 1, 1993 mandatory sinking fund
requirement and 70,000 shares were redeemed as a permitted optional sinking
fund payment, the latter two at the sinking fund redemption price of $100 per
share, plus accrued and unpaid dividends.
 
(8) COMED-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF COMED
FINANCING I
 
  In September 1995, ComEd Financing I (Trust), a wholly-owned subsidiary trust
of ComEd, issued 8,000,000 of its 8.48% ComEd-obligated mandatorily redeemable
preferred securities. The sole asset of the Trust is $206.2 million principal
amount of ComEd's 8.48% subordinated deferrable interest notes due September
30, 2035. There is a full and unconditional guarantee by ComEd of the Trust's
obligations
 
                                       31
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
under the securities issued by the Trust. However, ComEd's obligations are
subordinate and junior in right of payment to certain other indebtedness of
ComEd. ComEd has the right to defer payments of interest on the subordinated
deferrable interest notes by extending the interest payment period, at any
time, for up to 20 consecutive quarters. If interest payments on the
subordinated deferrable interest notes are so deferred, distributions on the
preferred securities will also be deferred. During any deferral, distributions
will continue to accrue with interest thereon. In addition, during any such
deferral, ComEd may not declare or pay any dividend or other distribution on,
or redeem or purchase, any of its capital stock.
 
  The subordinated deferrable interest notes are redeemable by ComEd (in whole
or in part) from time to time, on or after September 30, 2000, or at any time
in the event of certain income tax circumstances. If the subordinated
deferrable interest notes are redeemed, the Trust must redeem preferred
securities having an aggregate liquidation amount equal to the aggregate
principal amount of the subordinated deferrable interest notes so redeemed. In
the event of the dissolution, winding up or termination of the Trust, the
holders of the preferred securities will be entitled to receive, for each
preferred security, a liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon) to the date of payment,
unless in connection with the dissolution, the subordinated deferrable interest
notes are distributed to the holders of the preferred securities.
 
(9) LONG-TERM DEBT
 
  Sinking fund requirements and scheduled maturities remaining through 2000 for
ComEd's first mortgage bonds, sinking fund debentures and other long-term debt
outstanding at December 31, 1995, after deducting sinking fund debentures
reacquired for satisfaction of future sinking fund requirements, are summarized
as follows: 1996--$234,893,000; 1997--$689,168,000; 1998--$350,017,000; 1999--
$152,445,000; and 2000--$464,446,000. Scheduled payments through 2000 for
Unicom's loans payable are as follows: 1996--$1,099,000; 1997--$1,972,000;
1998--$2,465,000; 1999--$2,575,000; and 2000--$2,656,000. Unicom Enterprises'
note payable to bank of $42,000,000 will mature in 1998.
 
                                       32
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  At December 31, 1995, ComEd's outstanding first mortgage bonds maturing
through 2000 were as follows:
 
<TABLE>
<CAPTION>
                                                             PRINCIPAL AMOUNT
               SERIES                                     ----------------------
                                                          (THOUSANDS OF DOLLARS)
      <S>                                                 <C>
      5 1/4% due April 1, 1996...........................       $   50,000
      5 3/4% due November 1, 1996........................           50,000
      5 3/4% due December 1, 1996........................           50,000
      7% due February 1, 1997............................          150,000
      5 3/8% due April 1, 1997...........................           50,000
      6 1/4% due October 1, 1997.........................           60,000
      6 1/4% due February 1, 1998........................           50,000
      6% due March 15, 1998..............................          130,000
      6 3/4% due July 1, 1998............................           50,000
      6 3/8% due October 1, 1998.........................           75,000
      9 3/8% due February 15, 2000.......................          125,000
      6 1/2% due April 15, 2000..........................          230,000
      6 3/8% due July 15, 2000...........................          100,000
                                                                ----------
                                                                $1,170,000
                                                                ==========
</TABLE>
 
  Other long-term debt outstanding at December 31, 1995 is summarized as
follows:
 
<TABLE>
<CAPTION>
                                          PRINCIPAL
           DEBT SECURITY                   AMOUNT                             INTEREST RATE
 --------------------------------        ----------        -------------------------------------------------------
                                         (THOUSANDS
                                             OF
                                           DOLLARS)
 <S>                                      <C>                  <C>
 Unicom--
  Loans Payable:
    Loan due January 1, 2003             $   10,000        Interest rate of 8.31%
    Loan due January 1, 2004                 10,000        Interest rate of 8.44%
                                         ----------
                                         $   20,000
                                         ----------
 ComEd--
   Notes:
    Medium Term Notes, Series 1N
     due various dates through
     April 1, 1998                       $   50,500        Interest rates ranging from 9.40% to 9.65%
    Medium Term Note, Series 2N
     due July 1, 1996                        10,000        Interest rate of 9.85%
    Medium Term Notes, Series 3N
     due various dates through
     October 15, 2004                       322,250        Interest rates ranging from 8.92% to 9.20%
    Medium Term Notes, Series 4N
     due various dates through
     May 15, 1997                            46,000        Interest rates ranging from 8.11% to 8.875%
    Notes due February 15, 1997             150,000        Interest rate of 7.00%
    Notes due July 15, 1997                 100,000        Interest rate of 6.50%
    Notes due October 15, 2005              235,000        Interest rate of 6.40%
                                         ----------
                                         $  913,750
                                         ----------
  Long-Term Note Payable to
   Bank:
    Note due June 1, 1997                $  150,000        Prevailing interest rate of 6.375% at December 31, 1995
                                         ----------
  Purchase Contract Obligations:
    Woodstock due January 2, 1997        $       95        Interest rate of 4.50%
    Hinsdale due April 30, 2005                 473        Interest rate of 3.00%
                                         ----------
                                         $      568
                                         ----------
 Total ComEd                             $1,064,318
                                         ----------
 Unicom Enterprises--
  Note Payable to Bank:
    Note due November 22, 1998           $   42,000        Prevailing interest rate of 6.831% at December 31, 1995
                                         ----------
 Total Unicom                            $1,126,318
                                         ==========
</TABLE>
 
  Long-term debt maturing within one year has been included in current
liabilities.
 
                                       33
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  ComEd's outstanding first mortgage bonds are secured by a lien on
substantially all property and franchises, other than expressly excepted
property, owned by ComEd.
 
  ComEd recorded an extraordinary loss of $33 million in the fourth quarter of
1995 related to the early redemption of $645 million of long-term debt which
reduced net income by $20 million (after reflecting income tax effects of $13
million) or $0.09 per common share.
 
(10) LINES OF CREDIT
 
  ComEd had total bank lines of credit of approximately $922 million and unused
bank lines of credit of approximately $915 million at December 31, 1995. Of
that amount, $915 million (of which $175 million expires on September 30, 1996,
$72 million expires in equal quarterly installments commencing on December 31,
1996 and ending on September 30, 1998 and $668 million expires in equal
quarterly installments commencing on December 31, 1997 and ending on September
30, 1999) may be borrowed on secured or unsecured notes of ComEd at various
interest rates. The interest rate is set at the time of a borrowing and is
based on several floating rate bank indices plus a spread which is dependent
upon ComEd's credit ratings, or on a prime interest rate. Amounts under the
remaining lines of credit may be borrowed at prevailing prime interest rates on
unsecured notes of ComEd. Collateral, if required for the borrowings, would
consist of first mortgage bonds issued under and in accordance with the
provisions of ComEd's mortgage. ComEd is obligated to pay commitment fees with
respect to $915 million of such lines of credit.
 
  Unicom Enterprises has a $200 million credit facility which will expire in
1998 of which $158 million was unused as of December 31, 1995. The credit
facility can be used by Unicom Enterprises to finance investments in
unregulated energy-related businesses and projects, including Unicom Thermal,
and for general corporate purposes. The credit facility is guaranteed by Unicom
and includes certain covenants with respect to Unicom's and Unicom Enterprises'
operations. Such covenants include, among other things, (i) a requirement that
Unicom and its consolidated subsidiaries maintain a tangible net worth at least
$10 million over that of ComEd and its consolidated subsidiaries, (ii) a
requirement that Unicom's consolidated debt to consolidated capitalization not
exceed 0.65 to 1, (iii) restrictions on the indebtedness for borrowed money
that Unicom (excluding ComEd) and Unicom Enterprises may incur, and (iv) a
requirement that Unicom own 100% of the outstanding stock of Unicom Enterprises
and at least 80% of the outstanding stock of ComEd; and provide that Unicom may
not declare or pay dividends during the continuance of an event of default.
Interest rates for borrowings under the credit facility are set at the time of
a borrowing and are based on either a prime interest rate or a floating rate
bank index plus a spread which varies with the credit rating of ComEd's
outstanding first mortgage bonds.
 
(11) DISPOSAL OF SPENT NUCLEAR FUEL
 
  Under the Nuclear Waste Policy Act of 1982, the DOE is responsible for the
selection and development of repositories for, and the disposal of, spent
nuclear fuel and high-level radioactive waste. ComEd, as required by that Act,
has signed a contract with the DOE to provide for the disposal of spent nuclear
fuel and high-level radioactive waste from ComEd's nuclear generating stations
beginning not later than January 1998; however, this delivery schedule is
expected to be delayed significantly. The contract with the DOE requires ComEd
to pay the DOE a one-time fee applicable to nuclear generation through April 6,
1983 of approximately $277 million, with interest to date of payment, and a fee
payable quarterly equal to one mill per kilowatthour of nuclear-generated and
sold electricity after April 6, 1983. As provided for under the contract, ComEd
has elected to pay the one-time fee, with interest, just prior to the first
delivery of spent nuclear fuel to the DOE. The liability for the one-time fee
and the related interest is reflected in the Consolidated Balance Sheets.
 
                                       34
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
(12) FAIR VALUE OF FINANCIAL INSTRUMENTS
 
  The following methods and assumptions were used to estimate the fair value of
financial instruments either held or issued and outstanding. The disclosure of
such information does not purport to be a market valuation of Unicom and
subsidiary companies as a whole. The impact of any realized or unrealized gains
or losses related to such financial instruments on the financial position or
results of operations of Unicom and subsidiary companies is primarily dependent
on the treatment authorized under future ComEd ratemaking proceedings.
 
  Investments. Securities included in the nuclear decommissioning funds have
been classified and accounted for as "available for sale" securities. The
estimated fair value of the nuclear decommissioning funds, as determined by the
trustee and based on published market data, as of December 31, 1995 and 1994
was as follows:
 
<TABLE>
<CAPTION>
                                DECEMBER 31, 1995                DECEMBER 31, 1994
                         -------------------------------- --------------------------------
                                                                     UNREALIZED
                                    UNREALIZED                         GAINS
                         COST BASIS   GAINS    FAIR VALUE COST BASIS  (LOSSES)  FAIR VALUE
                         ---------- ---------- ---------- ---------- ---------- ----------
                                              (THOUSANDS OF DOLLARS)
<S>                      <C>        <C>        <C>        <C>        <C>        <C>
Short-term investments.. $   40,575  $    283  $   40,858  $ 65,203   $   106    $ 65,309
U.S. Government and
 Agency issues..........    156,745    17,636     174,381    94,450      (562)     93,888
Municipal bonds.........    496,707    34,970     531,677   478,074    (7,301)    470,773
Common stock............    348,866   107,280     456,146   220,395     9,069     229,464
Other...................     29,757     4,708      34,465    18,788     2,722      21,510
                         ----------  --------  ----------  --------   -------    --------
                         $1,072,650  $164,877  $1,237,527  $876,910   $ 4,034    $880,944
                         ==========  ========  ==========  ========   =======    ========
</TABLE>
 
  At December 31, 1995, the debt securities held by the nuclear decommissioning
funds had the following maturities:
 
<TABLE>
<CAPTION>
                                                           COST BASIS FAIR VALUE
                                                           ---------- ----------
                                                               (THOUSANDS OF
                                                                 DOLLARS)
      <S>                                                  <C>        <C>
      Within 1 year.......................................  $ 40,575   $ 40,858
      1 through 5 years...................................    73,996     76,978
      5 through 10 years..................................   229,132    247,521
      Over 10 years.......................................   366,667    398,510
</TABLE>
 
  The net earnings of the nuclear decommissioning funds, which are recorded as
increases to the accumulated provision for depreciation (only the realized
portion prior to January 1, 1994), for the years 1995, 1994 and 1993 were as
follows:
 
<TABLE>
<CAPTION>
                                                1995        1994       1993
                                             -----------  ---------  ---------
                                                 (THOUSANDS OF DOLLARS)
<S>                                          <C>          <C>        <C>
Gross proceeds from sales of securities..... $ 2,598,889  $ 811,368  $ 388,684
Less cost based on specific identification..  (2,581,714)  (811,997)  (377,734)
                                             -----------  ---------  ---------
Realized gains (losses) on sales of securi-
 ties....................................... $    17,175  $    (629) $  10,950
Other realized fund earnings net of ex-
 penses.....................................      46,294     38,148     29,878
                                             -----------  ---------  ---------
Total realized net earnings of the funds.... $    63,469  $  37,519  $  40,828
Unrealized gains (losses)...................     160,843    (57,948)    30,969
                                             -----------  ---------  ---------
 Total net earnings (losses) of the funds... $   224,312  $ (20,429) $  71,797
                                             ===========  =========  =========
</TABLE>
 
  Current Assets. Cash, temporary cash investments and other cash investments,
which include U.S. Government Obligations and other short-term marketable
securities, and special deposits, which primarily includes cash deposited for
the redemption, refund or discharge of debt securities, are stated at cost,
which approximates their fair value because of the short maturity of these
instruments. The securities included in these categories have been classified
as "available for sale" securities.
 
 
                                       35
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  Capitalization. The estimated fair values of ComEd preferred and preference
stocks, ComEd-obligated mandatorily redeemable preferred securities of the
Trust and long-term debt were obtained from an independent consultant. The
estimated fair values, which include the current portions of redeemable
preference stock and long-term debt but exclude accrued interest and dividends,
as of December 31, 1995 and 1994 were as follows:
 
<TABLE>
<CAPTION>
                                DECEMBER 31, 1995                DECEMBER 31, 1994
                         -------------------------------- ---------------------------------
                          CARRYING  UNREALIZED             CARRYING  UNREALIZED
                           VALUE      LOSSES   FAIR VALUE   VALUE     (GAINS)    FAIR VALUE
                         ---------- ---------- ---------- ---------- ----------  ----------
                                              (THOUSANDS OF DOLLARS)
<S>                      <C>        <C>        <C>        <C>        <C>         <C>
  ComEd preferred and
   preference stocks.... $  800,197  $ 14,769  $  814,966 $  818,111 $ (64,443)  $  753,668
  ComEd-obligated
   mandatorily
   redeemable preferred
   securities of the
   Trust................ $  200,000  $  6,000  $  206,000 $      --  $     --    $      --
  Long-term debt of
   subsidiary companies. $6,572,853  $470,175  $7,043,028 $7,448,236 $(450,429)  $6,997,807
</TABLE>
 
  Long-term notes payable, which are not included in the above table, amounted
to $212 million and $400 million at December 31, 1995 and 1994, respectively.
Such notes, for which interest is paid at fixed and prevailing rates, are
included in the consolidated financial statements at cost, which approximates
their fair value.
 
  Current Liabilities. The carrying value of notes payable, which consists of
commercial paper and bank loans maturing within one year, approximates the fair
value because of the short maturity of these instruments. See "Capitalization"
above for a discussion of the fair value of the current portion of long-term
debt and redeemable preference stock.
 
  Other Noncurrent Liabilities. The carrying value of accrued spent nuclear
fuel disposal fee and related interest represents the settlement value as of
December 31, 1995 and 1994; therefore, the carrying value is equal to the fair
value.
 
(13) PENSION BENEFITS
 
  ComEd and the Indiana Company have non-contributory defined benefit pension
plans which cover all regular employees. Benefits under these plans reflect
each employee's compensation, years of service and age at retirement. During
1995, these plans were amended to more closely base retirement benefits on
final pay. Funding is based upon actuarially determined contributions that take
into account the amount deductible for income tax purposes and the minimum
contribution required under the Employee Retirement Income Security Act of
1974, as amended. Actuarial valuations were determined as of January 1, 1995
and 1994.
 
  During 1994, the companies implemented an early retirement program for
employees eligible to retire or who would become eligible to retire after
December 31, 1993 and before April 1, 1995. A total of 679 employees accepted
the program, resulting in the recognition of approximately $34 million of
additional pension cost and an additional increase to the projected benefit
obligation of that $34 million and $41 million of unrecognized net loss. The
charge to income was approximately $20.5 million after reflecting income tax
effects as a result of the program.
 
                                       36
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  The funded status of these plans at December 31, 1995 and 1994 was as
follows:
 
<TABLE>
<CAPTION>
                                                           DECEMBER 31
                                                     ------------------------
                                                        1995         1994
                                                     -----------  -----------
                                                     (THOUSANDS OF DOLLARS)
<S>                                                  <C>          <C>
Actuarial present value of accumulated pension plan
 benefits:
  Vested benefit obligation......................... $(2,839,000) $(2,105,000)
  Nonvested benefit obligation......................    (251,000)    (359,000)
                                                     -----------  -----------
  Accumulated benefit obligation.................... $(3,090,000) $(2,464,000)
  Effect of projected future compensation levels....    (304,000)    (485,000)
                                                     -----------  -----------
  Projected benefit obligation...................... $(3,394,000) $(2,949,000)
Fair value of plan assets, invested primarily in
 U.S. Government, government-sponsored corporation
 and agency securities, fixed income funds, regis-
 tered investment companies, equity index funds and
 other equity funds ................................   3,060,000    2,547,000
                                                     -----------  -----------
Plan assets less than projected benefit obligation.. $  (334,000) $  (402,000)
Unrecognized prior service cost.....................     (73,000)      22,000
Unrecognized transition asset.......................    (142,000)    (155,000)
Unrecognized net loss...............................     204,000      239,000
                                                     -----------  -----------
  Accrued pension liability......................... $  (345,000) $  (296,000)
                                                     ===========  ===========
</TABLE>
 
  The assumed discount rates were 7.5% and 8.0% at December 31, 1995 and 1994,
respectively, and the assumed annual rate of increase in future compensation
levels was 4.0%. These rates were used in determining the projected benefit
obligations, the accumulated benefit obligations and the vested benefit
obligations.
 
  Pension costs were determined under the rules prescribed by SFAS No. 87,
including the use of the projected unit credit actuarial cost method and the
following actuarial assumptions for the years 1995, 1994 and 1993:
 
<TABLE>
<CAPTION>
                                                               1995  1994  1993
                                                               ----- ----- -----
<S>                                                            <C>   <C>   <C>
Annual discount rate.......................................... 8.00% 7.50% 7.50%
Annual rate of increase in future compensation levels......... 4.00% 4.00% 4.00%
Annual long-term rate of return on plan assets................ 9.75% 9.50% 9.50%
</TABLE>
 
  The components of pension costs, portions of which were recorded as
components of construction costs, for the years 1995, 1994 and 1993 were as
follows:
 
<TABLE>
<CAPTION>
                                                1995       1994       1993
                                              ---------  ---------  ---------
                                                  (THOUSANDS OF DOLLARS)
<S>                                            <C>        <C>        <C>
Service cost................................. $  87,000  $  97,000  $  96,000
Interest cost on projected benefit
 obligation..................................   225,000    213,000    204,000
Actual loss (return) on plan assets..........  (681,000)    37,000   (310,000)
Early retirement program cost................       --      34,000        --
Net amortization and deferral................   418,000   (302,000)    61,000
                                              ---------  ---------  ---------
                                              $  49,000  $  79,000  $  51,000
                                              =========  =========  =========
</TABLE>
 
  In addition, an employee savings and investment plan is available to certain
eligible employees of ComEd, Cotter, Unicom Thermal and the Indiana Company.
During the fourth quarter of 1995, the employee savings and investment plan was
amended for employees of ComEd, Cotter, Unicom Thermal and the management
employees of the Indiana Company. Each participating employee affected by the
amendments may contribute up to 20% of such employee's base pay and the
participating companies match such contribution equal to 100% of up to the
first 2% of contributed base salary, 70% of the second 3% of contributed base
salary and 25% of the last 1% of contributed base salary. During 1995, 1994 and
1993, the participating companies contributed $24,661,000, $22,756,000 and
$21,948,000, respectively.
 
                                       37
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
(14) POSTRETIREMENT HEALTH CARE BENEFITS
 
  ComEd and the Indiana Company provide certain postretirement health care
benefits for retirees and their dependents and for the surviving dependents of
eligible employees and retirees. The employees become eligible for
postretirement health care benefits when they reach age 55 with 10 years of
service. The liability for postretirement health care benefits is funded
through trust funds based upon actuarially determined contributions that take
into account the amount deductible for income tax purposes. The postretirement
health care plan for ComEd and the Indiana Company was amended, effective April
1, 1995. Prior to that date, the postretirement health care plan was fully
funded by the companies. With respect to employees who retire on or after April
1, 1995, the plan is contributory, funded jointly by the companies and the
participating employees. Actuarial valuations were determined as of January 1,
1995 and 1994.
 
  Postretirement health care costs in 1995 included $25 million related to a
voluntary separation offer for union employees who accepted and left ComEd's
employ by year-end 1995 combined with separation plans offered to selected
groups of non-union employees.
 
  The funded status of the plan at December 31, 1995 and 1994 was as follows:
 
<TABLE>
<CAPTION>
                                                              DECEMBER 31
                                                         ----------------------
                                                           1995        1994
                                                         ---------  -----------
                                                             (THOUSANDS OF
                                                               DOLLARS)
<S>                                                      <C>        <C>
Actuarial present value of accumulated postretirement
 health care obligation:
 Retirees..............................................  $(457,000) $  (467,000)
 Active fully eligible participants....................    (25,000)     (34,000)
 Other participants....................................   (418,000)    (581,000)
                                                         ---------  -----------
 Accumulated benefit obligation........................  $(900,000) $(1,082,000)
Fair value of plan assets, invested primarily in S&P
 500 common stocks and U.S. Government,
 government agency, municipal and listed corporate ob-
 ligations.............................................    603,000      503,000
                                                         ---------  -----------
Plan assets less than accumulated postretirement health
 care obligation.......................................  $(297,000) $  (579,000)
Unrecognized transition obligation.....................    374,000      531,000
Unrecognized net gain..................................   (285,000)     (70,000)
                                                         ---------  -----------
Accrued liability for postretirement health care.......  $(208,000) $  (118,000)
                                                         =========  ===========
</TABLE>
 
  Different health care cost trends are used for pre-Medicare and post-Medicare
expenses. Pre-Medicare trend rates were 14% for 1994 and 13.5% for the first
three months of 1995, grading down in 0.5% annual increments to 5%. Post-
Medicare trend rates were 11.5% for 1994 and 11% for the first three months of
1995, grading down in 0.5% annual increments to 5%. For the last nine months of
1995, pre-Medicare trend rates were 10%, grading down in 0.5% annual increments
to 5%. Post-Medicare trend rates were 8% for the last nine months of 1995,
grading down in 0.5% annual increments to 5%. The effect of a 1% increase in
the assumed health care cost trend rates for each future year would increase
the accumulated postretirement health care obligation at January 1, 1995 by
approximately $161 million and increase the aggregate of the service and
interest cost components of plan costs by approximately $20 million for the
year 1995. The assumed discount rates were 7.5% and 8.0% at December 31, 1995
and 1994, respectively. The annual long-term rate of return on plan assets was
9.32% and 9.04% for the years 1995 and 1994, respectively, after including
income tax effects.
 
                                       38
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  The components of postretirement health care costs, portions of which were
recorded as components of construction costs, for the years 1995, 1994 and 1993
were as follows:
 
<TABLE>
<CAPTION>
                                                    1995      1994      1993
                                                  --------  --------  --------
                                                    (THOUSANDS OF DOLLARS)
      <S>                                         <C>       <C>       <C>
      Service cost............................... $ 31,000  $ 47,000  $ 45,000
      Interest cost on accumulated benefit obli-
       gation....................................   69,000    81,000    74,000
      Actual loss (return) on plan assets........ (137,000)    9,000   (41,000)
      Amortization of transition obligation......   23,000    29,000    29,000
      Severance plan cost........................   25,000       --        --
      Other......................................   83,000   (49,000)    9,000
                                                  --------  --------  --------
                                                  $ 94,000  $117,000  $116,000
                                                  ========  ========  ========
</TABLE>
 
(15) SEPARATION PLAN COSTS
 
  Operation and maintenance expenses included $97 million for the year 1995
related to a voluntary separation offer for union employees who accepted and
left ComEd's employ by year-end 1995 combined with separation plans offered to
selected groups of non-union employees. These employee separation plans reduced
net income by $59 million or $0.27 per common share for the year 1995.
 
(16) INCOME TAXES
 
  The components of the net deferred income tax liability at December 31, 1995
and 1994 were as follows:
 
<TABLE>
<CAPTION>
                                                              DECEMBER 31
                                                         ----------------------
                                                            1995        1994
                                                         ----------  ----------
                                                             (THOUSANDS OF
                                                               DOLLARS)
<S>                                                      <C>         <C>
Deferred income tax liabilities:
 Accelerated cost recovery and liberalized deprecia-
  tion, net of removal costs...........................  $3,379,987  $3,266,930
 Overheads capitalized.................................     252,910     266,159
 Repair allowance......................................     219,585     210,655
 Regulatory assets recoverable through future rates....   1,689,832   1,791,395
Deferred income tax assets:
 Postretirement benefits...............................    (235,360)   (177,991)
 Unbilled revenues.....................................    (116,274)    (90,396)
 Loss carryforward.....................................         --      (10,090)
 Alternative minimum tax...............................    (145,019)   (283,331)
 Unamortized investment tax credits to be settled
  through future rates.................................    (452,210)   (471,058)
 Other regulatory liabilities to be settled through fu-
  ture rates...........................................    (148,792)   (179,755)
 Other--net............................................     (46,607)    (59,528)
                                                         ----------  ----------
Net deferred income tax liability......................  $4,398,052  $4,262,990
                                                         ==========  ==========
</TABLE>
 
The $135 million increase in the net deferred income tax liability from
December 31, 1994 to December 31, 1995 is comprised of $187 million of deferred
income tax expense and a $52 million decrease in regulatory assets net of
regulatory liabilities pertaining to income taxes for the year. The amount of
regulatory assets included in deferred income tax liabilities primarily relates
to the equity component of AFUDC which is recorded on an after-tax basis, the
borrowed funds component of AFUDC which was previously recorded net of tax and
other temporary differences for which the related tax effects were not
previously recorded. The amount of other regulatory liabilities included in
deferred income tax assets primarily relates to deferred income taxes provided
at rates in excess of the current statutory rate.
 
                                       39
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
  The components of net income tax expense charged to continuing operations for
the years 1995, 1994 and 1993 were as follows:
 
<TABLE>
<CAPTION>
                                                    1995      1994      1993
                                                  --------  --------  --------
                                                    (THOUSANDS OF DOLLARS)
<S>                                               <C>       <C>       <C>
Operating income:
 Current income taxes...........................  $339,920  $158,342  $(27,553)
 Deferred income taxes..........................   186,647   168,402   122,804
 Investment tax credits deferred--net...........   (28,710)  (28,757)  (29,424)
Other (income) and deductions...................    (7,685)  (22,498)  (31,076)
                                                  --------  --------  --------
Net income taxes charged to continuing
 operations.....................................  $490,172  $275,489  $ 34,751
                                                  ========  ========  ========
</TABLE>
 
  Provisions for current and deferred federal and state income taxes and
amortization of investment tax credits resulted in the following effective
income tax rates for the years 1995, 1994 and 1993:
 
<TABLE>
<CAPTION>
                                                   1995       1994      1993
                                                ----------  --------  --------
                                                   (THOUSANDS OF DOLLARS)
<S>                                             <C>         <C>       <C>
Net income before extraordinary item and
 cumulative effect of change in accounting for
 income taxes.................................. $  659,533  $354,934  $ 36,650
Net income taxes charged to continuing
 operations....................................    490,172   275,489    34,751
Provision for dividends on ComEd preferred and
 preference stocks.............................     69,961    64,927    66,052
                                                ----------  --------  --------
Pre-tax income before provision for dividends.. $1,219,666  $695,350  $137,453
                                                ==========  ========  ========
Effective income tax rate......................       40.2%     39.6%     25.3%
                                                ==========  ========  ========
</TABLE>
 
  The principal differences between net income taxes charged to continuing
operations and the amounts computed at the federal statutory rate of 35% for
the years 1995, 1994 and 1993 were as follows:
 
<TABLE>
<CAPTION>
                                                     1995      1994      1993
                                                   --------  --------  --------
                                                     (THOUSANDS OF DOLLARS)
<S>                                                <C>       <C>       <C>
Federal income taxes computed at statutory rate..  $426,883  $243,373  $ 48,109
Equity component of AFUDC which was excluded from
 taxable income..................................    (4,595)   (7,920)   (7,216)
Amortization of investment tax credits...........   (28,710)  (28,810)  (29,421)
State income taxes, net of federal income taxes..    65,972    40,140    13,138
Differences between book and tax accounting,
 primarily property-related deductions...........    27,534    26,505     2,063
Other--net.......................................     3,088     2,201     8,078
                                                   --------  --------  --------
Net income taxes charged to continuing
 operations......................................  $490,172  $275,489  $ 34,751
                                                   ========  ========  ========
</TABLE>
 
  Current federal income tax liabilities which were recorded prior to 1995
included excess amounts of AMT over the regular federal income tax, which
amounts were also recorded as decreases to deferred federal income taxes. The
excess amounts of AMT were carried forward and a portion was applied as a
credit against the 1995 regular federal income tax liability. The excess
amounts of AMT can be carried forward indefinitely as a credit against future
years' regular federal income tax liabilities.
 
                                       40
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
 
(17) TAXES, EXCEPT INCOME TAXES
 
  Provisions for taxes, except income taxes, for the years 1995, 1994 and 1993
were as follows:
 
<TABLE>
<CAPTION>
                                                       1995     1994     1993
                                                     -------- -------- --------
                                                       (THOUSANDS OF DOLLARS)
      <S>                                            <C>      <C>      <C>
      Illinois public utility revenue............... $229,546 $211,263 $199,498
      Illinois invested capital.....................  106,830  109,373  111,126
      Municipal utility gross receipts..............  167,758  145,011  107,232
      Real estate...................................  176,454  180,221  162,560
      Municipal compensation........................   78,602   72,647   56,878
      Other--net....................................   74,166   69,281   64,619
                                                     -------- -------- --------
                                                     $833,356 $787,796 $701,913
                                                     ======== ======== ========
</TABLE>
 
(18) LEASE OBLIGATIONS OF SUBSIDIARY COMPANIES
 
  Under its nuclear fuel lease arrangement, ComEd may sell and lease back
nuclear fuel from a lessor who may borrow an aggregate of $700 million,
consisting of $300 million of commercial paper or bank borrowings and $400
million of intermediate term notes, to finance the transactions. With respect
to the commercial paper/bank borrowing portion, $20 million will expire on
November 23, 1996, $10 million will expire on November 23, 1997 and $270
million will expire on November 23, 1998. ComEd has asked for an extension of
the expiration dates. At December 31, 1995, ComEd's obligation to the lessor
for leased nuclear fuel amounted to approximately $577 million. ComEd has
agreed to make lease payments which cover the amortization of the nuclear fuel
used in ComEd's reactors plus the lessor's related financing costs. ComEd has
an obligation for spent nuclear fuel disposal costs of leased nuclear fuel.
 
  Future minimum rental payments, net of executory costs, at December 31, 1995
for capital leases are estimated to aggregate $659 million, including $231
million in 1996, $171 million in 1997, $112 million in 1998, $68 million in
1999, $37 million in 2000 and $40 million in 2001-2043. The estimated interest
component of such rental payments aggregates $84 million. The estimated
portions of obligations due within one year under capital leases are included
in current liabilities and approximated $168 million and $147 million at
December 31, 1995 and 1994, respectively.
 
  Future minimum rental payments at December 31, 1995 for operating leases are
estimated to aggregate $157 million, including $9 million in 1996, $10 million
in 1997, $10 million in 1998, $10 million in 1999, $9 million in 2000 and $109
million in 2001-2024.
 
(19) INVESTMENTS IN URANIUM-RELATED PROPERTIES
 
  In May 1994, ComEd recorded a reduction in the carrying value of its
investments in uranium-related properties after completing a review of various
alternatives and reassessing the long-term recoverability of those investments.
The effects of the reduction reduced 1994 net income by $34 million or $0.16
per common share.
 
                                       41
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
(20) JOINT PLANT OWNERSHIP
 
  ComEd has a 75% undivided ownership interest in the Quad-Cities nuclear
generating station. Further, ComEd is responsible for 75% of all costs which
are charged to appropriate investment, operation or maintenance accounts and
provides its own financing. At December 31, 1995, for its share of ownership in
the station, ComEd had an investment of $558 million in production and
transmission plant in service (before reduction of $185 million for the related
accumulated provision for depreciation) and $75 million in construction work in
progress.
 
(21) COMMITMENTS AND CONTINGENT LIABILITIES
 
  Purchase commitments, principally related to construction and nuclear fuel,
approximated $1,158 million at December 31, 1995, comprised of approximately
$1,137 million for ComEd and the Indiana Company and approximately $21 million
for Unicom Thermal. In addition, ComEd has substantial commitments for the
purchase of coal. ComEd's coal costs are high compared to those of other
utilities. ComEd's western coal contracts and its rail contracts for delivery
of the western coal provide for the purchase of certain coal at prices
substantially above currently prevailing market prices. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
subcaption "Liquidity and Capital Resources," for additional information
regarding ComEd's purchase commitments.
 
  ComEd is a member of NML, established to provide insurance coverage against
property damage to members' nuclear generating facilities. The members are
subject to a retrospective premium adjustment in the event losses exceed
accumulated reserve funds. Capital has been accumulated in the reserve funds of
NML to the extent that ComEd would not be liable for a retrospective premium
adjustment in the event of a single incident. However, ComEd could be subject
to a maximum assessment of approximately $57 million in any policy year, in the
event losses exceed accumulated reserve funds.
 
  ComEd also is a member of NEIL, which provides insurance coverage against the
cost of replacement power obtained during certain prolonged accidental outages
of nuclear generating units and coverage for property losses in excess of $500
million occurring at nuclear stations. All companies insured with NEIL are
subject to retrospective premium adjustments if losses exceed accumulated
reserve funds. Capital has been accumulated in the reserve funds of NEIL to the
extent that ComEd would not be liable for a retrospective premium adjustment in
the event of a single incident under the replacement power coverage and the
property damage coverage. However, ComEd could be subject to maximum
assessments, in any policy year, of approximately $27 million and $108 million
in the event losses exceed accumulated reserve funds under the replacement
power and property damage coverages, respectively.
 
  Under certain circumstances, member companies are eligible to continue to
receive distributions from accumulated reserve funds, if declared by NML or
NEIL, after insurance coverage has terminated on a nuclear generating station.
ComEd expects that any such post-coverage distributions would begin about the
time a station is decommissioned and continue for an undetermined period.
ComEd's twelve operating nuclear units have estimated remaining service lives
ranging from 10 to 32 years. Considering the circumstances related to the
declaration of such distributions and the extended period over which such
distributions may be declared, ComEd does not expect that any such
distributions would have a material impact on its financial position or results
of operations.
 
  The NRC's indemnity for public liability coverage under the Price-Anderson
Act is supported by a mandatory industry-wide program under which owners of
nuclear generating facilities could be assessed in the event of nuclear
incidents. Based on the number of nuclear reactors with operating licenses,
ComEd
 
                                       42
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONTINUED
would currently be subject to a maximum assessment of $991 million in the event
of an incident, limited to a maximum of $125 million in any calendar year.
 
  In addition, ComEd participates in the American Nuclear Insurers and Mutual
Atomic Energy Liability Underwriters Master Worker Program which provides
coverage for worker tort claims filed for bodily injury caused by the nuclear
energy hazard. The coverage applies to workers whose "nuclear related
employment" began after January 1, 1988. ComEd would currently be subject to a
maximum assessment of approximately $36 million in the event losses exceed
accumulated reserve funds.
 
  Shareholder derivative lawsuits were filed in 1992 and 1993 in the Circuit
Court against current and former directors of ComEd alleging that they breached
their fiduciary duty and duty of care to ComEd in connection with the
management of the activities associated with the construction of ComEd's four
most recently completed nuclear generating units. The lawsuits sought
restitution to ComEd by the defendants for unquantified and undefined losses
and costs alleged to have been incurred by ComEd. Both lawsuits were dismissed
by the Circuit Court and that dismissal was affirmed by the Illinois Appellate
Court. One of the plaintiffs has filed a petition for leave to appeal in the
Illinois Supreme Court.
 
  During 1989 and 1991, actions were brought in federal and state courts in
Colorado against ComEd and Cotter seeking unspecified damages and injunctive
relief based on allegations that Cotter has permitted radioactive and other
hazardous material to be released from its mill into areas owned or occupied by
the plaintiffs resulting in property damage and potential adverse health
effects. In February 1994, a federal jury returned nominal dollar verdicts on
eight bellwether plaintiffs' claims in these cases. Plaintiffs have appealed
those judgments. Although the remaining cases will necessarily involve the
resolution of numerous contested issues of fact and law, Unicom's determination
is that these actions will not have a material impact on its financial position
or results of operations.
 
  ComEd is involved in administrative and legal proceedings concerning air
quality, water quality and other matters. The outcome of these proceedings may
require increases in future construction expenditures and operating expenses
and changes in operating procedures. ComEd and its subsidiaries are or are
likely to become parties to proceedings initiated by the U.S. EPA, state
agencies and/or other responsible parties under CERCLA with respect to a number
of sites, including MGP sites, or may voluntarily undertake to investigate and
remediate sites for which they may be liable under CERCLA.
 
  ComEd generally did not operate MGPs as a corporate entity but did, however,
acquire MGP sites as part of the absorption of smaller utilities and as vacant
real estate on which ComEd facilities have been constructed. To date, ComEd has
identified 44 former MGP sites for which it may be liable for remediation.
ComEd presently estimates that its costs of former MGP site investigation and
remediation will aggregate from $25 million to $150 million in current-year
(1996) dollars. It is expected that the costs associated with investigation and
remediation of former MGP sites will be incurred over a period of approximately
20 to 30 years. Because ComEd is not able to determine the most probable
liability for such MGP costs, in accordance with accounting standards, a
reserve of approximately $25 million was recorded as of December 31, 1995 and
1994, which reflects the low end of the range of ComEd's estimate of the
liability associated with former MGP sites. In addition, as of December 31,
1995 and 1994, a reserve of $8 million was recorded representing ComEd's
estimate of the liability associated with cleanup costs of remediation sites
other than former MGP sites. Unicom presently estimates that ComEd's costs of
investigating and remediating the former MGP and other remediation sites
pursuant to CERCLA and state environmental laws will not have a material impact
on Unicom's financial position or results of operations. These cost estimates
are based on currently available information regarding the responsible
 
                                       43
<PAGE>
 
                  UNICOM CORPORATION AND SUBSIDIARY COMPANIES
 
                    NOTES TO FINANCIAL STATEMENTS--CONCLUDED
parties likely to share in the costs of responding to site contamination, the
extent of contamination at sites for which the investigation has not yet been
completed and the cleanup levels to which sites are expected to have to be
remediated.
 
(22) QUARTERLY FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                              AVERAGE   EARNINGS
                                                             NUMBER OF   (LOSS)
                                                    NET       COMMON      PER
                             OPERATING  OPERATING  INCOME     SHARES     COMMON
THREE MONTHS ENDED            REVENUES   INCOME    (LOSS)   OUTSTANDING  SHARE
------------------           ---------- --------- --------  ----------- --------
                                     (THOUSANDS EXCEPT PER SHARE DATA)
<S>                          <C>        <C>       <C>       <C>         <C>
March 31, 1994.............. $1,524,750 $213,014  $ 36,020    213,780    $ 0.17
June 30, 1994............... $1,432,166 $184,918  $(23,339)   213,923    $(0.11)
September 30, 1994.......... $1,855,276 $438,994  $263,661    214,138    $ 1.23
December 31, 1994........... $1,465,329 $246,322  $ 78,592    214,283    $ 0.37
March 31, 1995.............. $1,578,136 $260,526  $ 88,601    214,429    $ 0.41
June 30, 1995............... $1,559,521 $276,673  $108,866    214,677    $ 0.51
September 30, 1995.......... $2,190,862 $582,006  $407,433    214,769    $ 1.90
December 31, 1995........... $1,581,526 $219,394  $ 34,611    214,889    $ 0.16
</TABLE>
 
                                       44
<PAGE>
 
                                           Unicom Corporation
                                           One First National Plaza
                                           P.O. Box A-3005
                                           Chicago, Illinois 60690-3005

[Unicom Logo]



February 9, 1996


Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Unicom Corporation
    Commission File No. 1-11375


Ladies and Gentlemen:

Submitted for filing under the Securities Exchange Act of 1934, as amended, is
one copy of a Form 8-K Current Report relating to Unicom Corporation.

As stated in the Form 8-K Current Report, its purpose is to file certain
financial information regarding Unicom Corporation and its subsidiaries as of
and for the year ended December 31, 1995.


Sincerely,

UNICOM CORPORATION

By:        David A. Scholz
   ----------------------------------
David A. Scholz
Secretary


Enclosures